Over the past six months, the number of crypto funds has almost tripled – from fifty to almost 140. Some are not suitable for investors under the conditions and some are so doubtful that even beginners do not risk investing money there. Many investors simply stop at the famous. We will look at the most popular crypto funds in the world and in the CIS in this article, and at the same time we will try to understand whether such investments make sense!
The choice of a cryptocurrency fund depends primarily on the aspirations of the investor. The key goal of the investor is high income with minimum risks, but the ways to achieve it through crypto funds differ.
Some crypto funds are organized according to the principle of venture capital, that is, they invest in new projects in the field of blockchain technologies. Some work only with ICO, and some – with startups that do not go to ICO.
The selection of startups is also varied, some funds invest only in crypto-resources and some work with all projects, even if there is only a local currency in the form of token from the blockchain.
Other crypto funds work on the principle of hedge funds, that is, they invest in cryptocurrencies, regardless of their novelty and popularity and do not work with start-ups as such. They can invest in ICO tokens, but if for the venture funds the main role is played by the product, then for hedge funds the position and availability of the token in the market.
An investor should determine, based on his own interests and ideas about reliability, which crypto fund is more suitable for him. Perhaps investing in an ICO seems to him a dubious strategy – and then it makes sense to turn to cryptocurrency hedge funds.
Other investors, on the contrary, expect that blockchain products will eventually become better and, therefore, more in demand, and therefore it makes sense to cooperate with funds that understand this issue.
Third, investors are interested in the integration speedy of a cryptocurrency economy into the global one and therefore prefer crypto funds that are supported by companies based on the blockchain, but producing a product that is not associated with the blockchain. There are many options.
It is impossible to make a complete list of criteria, because the differences between the funds are not much smaller than the funds themselves. Each has its own advantages and disadvantages and should be considered not only against the background of the overall picture, but also in isolation from other funds.
Bart Stevens managed a hedge fund targeting Silicon Valley stocks until 2013. Bradford Stevens founded a company dedicated to cryptography and internet security. Brock Pearce was chairman of one of the first Bitcoin funds in the United States, which appeared shortly after the spread of Bitcoin.
Blockchain Capital invests in all projects related to blockchain technology, but mainly in companies that may be useful to the cryptosphere in the future. The income from them promises to investors. It has its own currency, BCAP, which is well kept in the market, although it is highly dependent on fluctuations in the Bitcoin exchange rate. Subject to US law.
The main drawback of the fund is the uncertainty about the specific investment conditions that potential investors have to find out individually. The threshold of entry is not published, but, apparently, is missing. However, the fees may vary depending on how much the investor invests.
It worked as an ordinary venture capital fund until 2013, giving preference to projects in the field of financial technologies and from 2013 Morehead reduced the investment strategy to blockchain projects.
Among the analysts now are Joey Krag, currency developer Augur Paul Veradittakat, consultant to numerous cryptocurrency and not only funds and investment platforms (OpenToken, BitOasis, The House Fund, Boost VC, Alchemist, Orchid, Origin and Icon) Jed McCaleb, developer Stellar and one from Ripple developers, co-founders of the traditional hedge fund of Ocular Capital LLC, Charles Noyes and Brody West, are an experienced Wall Street trader Paul Brodsky.
Since Pantera Capital has a moderately profitable portfolio, Pantera Capital has projects such as ShapeShift, which yielded good profitability at first, Polychain Capital, Koinex, 0x, Ripple and Augur, as well as a number of other more or less known projects.
This means that investors, buying domestic currency (the TKN token in this case), acquire a stake in the organization and are entitled to a portion of the income proportional to the investment. Income is achieved through the formation of a cryptocurrency portfolio and its management.
The founders are entrepreneurs Vladimir Smerkis and Victor Shpakovsky. Cryptocurrency porttels are compiled by them with the help of third-party block analysts Alex Fork and Wulf Kaal. All portfolio compilers have relative prominence in their circles, but not further.
The profitability of the fund is over 100% per year, but a high income is recorded at the moments of cryptocurrency growth. The profitability of the fund is significantly correlated with the situation on the crypto market, which makes it doubt the profitability in the face of a falling market.
It invests both in cryptocurrencies and in startups based on the blockchain, but not always directly related to it (for example, the last major investment is VIMANA Global, the blockchain company dedicated to developing autonomous air transport). Domestic currency – TaaS, in which investors receive dividends.
The main advantage of the fund is its effectiveness in any conditions and reliability. Payments are made according to the schedule, quarterly. Investors get 50% of the fund’s income.
Cryptocurrency portfolio is transparent, published on the official website. Since it is maximally protected from risks and includes stablecoins, the fund makes a profit even in the face of declining market.
Among other things, the TaaS currency itself is slowly but surely growing less than a year ago. The coin cost $ 0.28, now it’s $ 4. Moreover, the growth of the token is periodically observed in the fall of most of the others.
The results of 3/4 of the existing crypto funds raise reasonable doubts. Many have appeared recently and do not inspire confidence, because there is a little information about them. Others have been functioning for a long time, but successful projects in an asset are two or three.
With the results that reflect the portfolio of these companies, investing in them seems as reasonable as it is advisable to invest independently for a beginner – given that self-investing significantly increases the security of investor funds.
Many now popular cryptocurrency projects have risen, not least because of the investments of venture cryptocurrency funds and investors have received a profit last year, amounting not even a hundred, but hundreds of percent. On the other hand, it is not very difficult to obtain such numbers with the growth of cryptocurrency, which we have observed over the past year.
If earlier crypto funds made good profits only due to a well-formed and well-managed portfolio, now crypto funds require a really deep analysis of projects that could “shoot” with a general fall in cryptocurrencies due to their relevance outside the cryptosphere or through revolutionary solutions in the blockchain.
A team of experienced analysts who have connections with the developers of existing currencies and blockchain resources (and they, as we see, work with some crypto funds), has more chances to detect such a startup at an early stage than a newcomer who first bought bitcoins a month ago.
Conversely, a more or less experienced cryptoinvestor may have the same chances as the unknown founders of the new fund. It is possible that these founders may even be less experienced than the investor himself.
What is the conclusion? Focus on the team, on profitability and other fund performance indicators and in the face of a declining market, as in the growth conditions, each fund will show an attractive return and proceed from this.
If, when a cryptocurrency falls, the investor can earn money himself – he doesn’t need any funds, and if the fund’s profitability exceeds the profit that he can provide for himself, it makes sense to consider transferring funds to fund management.