As Bitcoin continues to decline even further, a senior digital currency investor has revealed that Cryptocurrency funds are still rated higher than hedge funds. According to Mr. Dan Morehead, who is the current Chief Executive Officer for Pantera Capital; a number of established institutions have been doing all they can to get exposed to crypto hedge funds and the Cryptocurrency.
Bitcoin Headed for a Surge
Morehead also went ahead to reveal that Bitcoin is headed for a remarkable price surge in the coming few weeks. He says that once this crypto coin makes a return to the peak levels in the coming few weeks, it will be able to pick up well and grow from there.
Pantera Capital that is headed by Mr. Dan Morehead started operating in 2003 but would later venture into Cryptocurrency funds ten years later. So far the company has had 22,000% returns on its crypto hedge fund. It is basically an investment and hedge fund company that deals mainly with the Blockchain technology and the Cryptocurrency.
Speaking to CNBC’s Fast Money on 8th February 2018, Mr. Morehead stated that Bitcoin being a dollar asset class that is valued at a half a trillion makes it a very wild circumstance. He went ahead to note that this leading virtual currency is still strongly held by organizational capitalists making it trade at its own beat.
What are the Hedge Funds?
Popularly referred to as the crypto hedge fund, this is basically an assortment of partially regulated investments that are invested in any kind of business based on certain wide strategic restrictions. Hedge funds posses effective merchandising layouts that include price arbitrage, leveraged trading, as well as algorithmic trading among other factors.
Hedge funds charge a management fee that is comparable to the publicly traded funds and private buy-and-hold funds. Besides that, they also charge a performance fee, which in most instances ranges from 15 to 45%. This kind of fee is only paid out whenever the hedge fund is capable of generating better returns than to just owning Cryptocurrencies like Bitcoins. This type of benchmark outperformance is known as alpha.
Some of the well-known hedge funds are the Logos Fund, which is a Bitcoin and mining fund in Germany. The other one is Metastable, a US Altcoins and Bitcoin funds, Polychain, a US ICO fund and digital token fund, and the Global Advisors, a Bitcoin fund in Jersey that also sponsors COINXBE and COINXBT.
What is Expected of Hedge Funds?
As time moves by, professionally managed funds are today turned into liquid crypto assets. This has led to the reduction of risks such as the trading centralization of China, lack of liquidity, insufficient advanced financial products, and regulatory uncertainty. These are the factors that barred Wall Street investors from venturing into the crypto market. In the coming years, Hedge funds are expected to grow and create more improved merchandising propositions and help in bringing together Cryptocurrencies to other asset types like commodities and equities.
In the end, publicly traded funds will be unbound from Bitcoin to Ethereum before reaching the crypto indexes.