As fund managers and investors seek to tap growing demand for virtual assets that allow for instant, borderless transactions, Alphabit, a global fund that invests in digital currencies, has been launched with a target of $300 million.
The co-founder of the fund – Liam Robertson said in an interview recently.
Digital currencies such as bitcoin are generally used by members of virtual communities and these are only issued and usually controlled by its developers. And according to Coinmarket.com, noting a rise of nearly 260 percent over the past 12 months, this sector’s market capitalization has surged more than 60 percent so far this year to reach nearly $30 billion.
Managing to raise about $15 million from venture capitalists and investors the last few months, funds such as Polychain Capital which raised the money, is among a few handful of digital currency funds that have emerged over the past year and which are interested in investing in this form of currencies.
“As you see the digital currency market progress and grow, we have seen professionals come to the market, allowing the sector to become a more streamlined and professional space,” Robertson said. “The sector is now in a great position to further strengthen and grow.”
Robertson, who is also chief executive and head of investments, said that an initial seed capital of $1 million raised among the founders and company executives was the initial investment of the fund Alphabit which is a hybrid between an open-ended mutual fund and a hedge fund.
He said that when the fund has a six-month track record, a formal launch of the fund would take place at a conference in China in September.
Dubai and the Cayman Islands are the places where Alphabit is registered.
2.5 percent for management and 45 percent for performance are the fees for the fund. Robertson, a former currency trader at hedge fund Light Peak Capital in London, said that the latter will only apply if the fund outperforms the price of bitcoin.
“We would be very surprised if we don’t return at least 100 percent for the year,” he said.
Robertson said that investing in the sale of tokens by blockchain start-ups, algorithmic schemes, and leveraged trading, would be the blend of active strategies that would be used by the fund – Alphabit. He added that outperforming bitcoin at lower volatility would be helped to be made possible by these strategies.
Having first became well known as the software underpinning bitcoin, blockchain is a public online ledger of transactions. And now, as a way to permanently record and keep track of assets or transactions across all industries, that technology is sought after by government and private corporations.
(Adapted from Reuters)