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BTC hodlers outperformed crypto funds by 69% in H1: 21e6 Capital

August 5, 2023 Coin Telegraph

According to 21e6 Capital AG, crypto funds generally outperformed the price gains of BTC in previous bull runs, but they ultimately suffered this year from having too much cash on hand and playing it safe.

The classic buy and hold, or hodl, approach to Bitcoin (BTC) outperformed most crypto funds by 68.8% in the first half (H1) of 2023.

According to data from Switzerland-based investment adviser 21e6 Capital AG, on average, crypto funds generated returns of 15.2% in the first half of 2023, but BTC saw gains of around 84%.

Crypto funds on average generated 15.2% return in the first half of 2023 lol pic.twitter.com/vb8pwYfiX9
— Alex Krüger (@krugermacro) August 5, 2023

In the report, 21e6 Capital AG’s head of marketing, Maximilian Bruckner, outlined that crypto funds have been “frequently able to significantly outperform Bitcoin in previous bull runs.”

Bruckner attributed much of the underwhelming performance of crypto funds in 2023 to the challenging market conditions and the significant amount of cash they had on hand in late 2022.

Following the implosion of FTX and other crypto projects in 2022, the report suggested that many crypto funds opted to take risk off the table and develop cash buffers, therefore missing out on a significant BTC price rally in H1 of 2023.

“Funds with large cash positions will underperform Bitcoin in a bull market, unless the funds’ assets perform significantly better than Bitcoin.”

“Due to the general sentiment left behind by the end of 2022, many funds had larger-than-normal cash positions. Furthermore, most major altcoins also underperformed Bitcoin – a tough environment for funds,” the report adds.

*Directional fund strategy comparison H1 2023. Source: 21e6 Capital AG*

At the time of writing, BTC is priced at roughly $29,000, and it continues to struggle to hold above the $30,000 level, which has only been briefly surpassed on a couple of occasions in 2023.

Despite this, current prices mark a 75% price gain for the asset since Jan. 1, as per CoinGecko data.

“All crypto fund strategies achieved positive results this year. But relative to Bitcoin, they underperformed, especially those with significant exposure to altcoins, to futures, or those strongly dependent on momentum signals.”

“Going forward, we are keeping a close eye on which exchanges will establish themselves as leading futures providers. Furthermore, the level of the funding rates in crypto futures markets and the ability of quantitative funds to capture trends will be areas of focus when we observe the markets,” the report adds.

Ultimately the report highlighted that investor sentiment has slightly improved over H1 2023, suggesting that some funds may soon start piling in more cash into the crypto sector.

However, it did note that current data relating to inflows and outflows indicate that a “full recovery of sentiment” has not yet taken place.

*Non-direction crypto fund strategy comparison H1 2023. Source: 21e6 Capital AG*

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Three Aussie crypto funds halted as regulator cites non-compliance

October 17, 2022 Coin Telegraph

ASIC

Three funds tracking Bitcoin, Ethereum, and FileCoin have been issued interim stop orders by Australia’s market regulator due to "non-compliant" target market determinations.

Australia’s chief financial market regulator has placed interim stop orders on three cryptocurrency-related funds set to be offered to retail investors, due to non-compliant target market determinations (TMDs).

In a media release dated Oct. 17 local time, the Australian Securities and Investments Commission (ASIC) said it has placed interim stop orders on three of Australian asset manager Holon's crypto funds — which separately aim to invest in Bitcoin (BTC), Ethereum (ETH), and FileCoin (FIL).

A target market determination is a document that describes who a product is appropriate for, based on likely needs, objectives, and financial situation as well as how the product can be distributed, according to Invest Smart.

In a statement to Cointelegraph, a spokesperson from ASIC said the TMDs were “too broad [...] given the volatility and speculative nature of crypto markets.”

They added the regulator's concern that Holon has “not appropriately considered the features and risks of the funds in determining their target markets.”

In its statement, ASIC said it considers the funds not suited to the wide target market defined in the TMDs, including those with a “medium, high, or very high risk and return profile,” those intending to use the fund as a “satellite component” — up to 25% of their portfolio, and those who intend to use the fund for 75% to 100% of their investment portfolio.

ASIC added that cryptocurrency funds could see investors exposed to significant negative returns but stated the product disclosure statements (PDS) provided by Holon say they could face a “total loss of value.”

“ASIC made the interim orders to protect retail investors from potentially investing in funds that may not be suitable for their financial objectives, situation or needs,” it said, adding that the order would be valid for 21 days unless revoked earlier.

The specifics of what ASIC has requested Holon to change are unclear and the ASIC spokesperson did not provide further details, however, the regulator said it expects Holon to consider the concerns and take immediate steps to ensure compliance.

The interim stop will prevent Holon from sharing a PDS, providing general advice on the funds, or issuing shares of the funds to retail investors.

The regulator also expects Holon to address the concerns “within a timely manner” otherwise a final stop order will be issued, though Holon will be given the opportunity to make submissions before such an order is made.

A spokesperson from Holon told Cointelegraph the company is not making comments on the matter “at this stage.”

The funds, named the Holon Bitcoin Fund, Holon Ethereum Fund, and Holon FileCoin Fund are all managed investment schemes that aim to give exposure to the price of the corresponding crypto and work by investors pooling money who in return receive a relative stake in the scheme.

In this case, the pooled money is used to purchase the digital asset named in the fund with custody handled by the Gemini crypto exchange according to a July blog from the company.

‘Everything’s on sale’: Reddit founder, Galaxy and Genesis execs raise big money

August 31, 2022 Coin Telegraph

Alexis Ohanian

776’s fund is called “Kryptos” and is set to capitalize on the current bear market when it launches in October.

Reddit co-founder Alexis Ohanian’s venture capital (VC) firm Seven Seven Six (776) is looking to raise a crypto investment fund worth $177.6 million, while current and former executives from Galaxy Digital and Genesis are raising a $500 million fund of their own.

776’s crypto play

According to an Aug. 29 report from The Information, 776’s fund “Kryptos” will launch in October to capitalize on the current bear market. It emphasized there are currently some bargain bin token discounts on the market that are ripe for the taking.

“This is the best time to buy if you’re really long on the industry. It’s on sale. Everything is on sale,” said Katelin Holloway, Founding Partner at Seven Seven Six.

The firm registered with the Securities and Exchange Commission (SEC) to become an investment advisor in April, enabling the firm to invest in crypto and manage crypto investment funds.

While 776 has invested in a host of crypto/blockchain projects, it will be the VC firm’s first fund that is solely focused on crypto assets. It will charge investors a relatively hefty management fee of 2.5% and offer a universal profit-sharing plan of 25%.

According to 776’s website, its investment portfolio has exposure to Bored Ape Yacht Club creators Yuga Labs, the Doodles NFT project, Web3 fantasy franchise the Forgotten Runes Wizard’s Cult, and blockchain API and node infrastructure startup, QuickNode to name a few.

Galaxy and Genesis

According to an Aug. 26 Form D filing with the SEC, a $500 million fund headed up by current and former Galaxy and Genesis execs is called the DBA Crypto Fund I, LP.

Details on the fund are sparse at this stage, other than the group indicating that it will be a pooled investment fund and private equity fund.

In terms of securities offered, the only indications so far are “pooled investment fund “interests” and “other.”

The group of execs behind the fund consists of Galaxy Digital’s vice-president of investments Michael Jordan, Genesis’s head of derivatives Joshua Lim and former Genesis vice president of trading Roshun Patel. Alongside them, the CEO and founder of trading firm Convex Optimization Group, Shane Barratt rounds off the list of the managing members.

These crypto funds are not the only ones with big names behind them grabbing headlines over the past week, with Cointelegraph reporting on Aug. 25 that Polygon founder Sandeep Nailwal had raised $50 million for a new startup fund dedicated to Web3 firms.

A week prior to that, CoinFund also launched a $300 million early stage Web3 venture fund to invest in crypto and other blockchain sub-sectors.

Crypto Funds