Cryptocurrency Hedge Fund Returns 2,129% YTD
Here is a cryptocurrency fund that is making crazy returns of 2,129% this year (with exceptional risk, of course): Alternative Money Fund
In fact, its the best performing hedge fund this year!
I wonder how many more hedge funds will follow suit into the cryptocurrency markets in order to raise the now common below-market returns? With asset prices overvalued and fixed-income streams at record lows, it’s no wonder that people are chasing exceptional returns in unknown territories.
It seems like returns at this fund are more from technical than fundamental analysis. And how would you fundamentally analyse blockchain assets? I find that trying to analyse a rapidly evolving cutting edge technology is incredibly difficult, simply because the ground keeps changing every year (new regulations are being implemented in the moment). And what would happen if they raised a very substantial amount of money, in the tens of billions? Would they be able to generate these same returns? Its a very volatile market (possibly a bubble) and its this volatility that’s driving these returns. I wonder what the “beta” of these blockchain assets would be?
Their “strategy” is finding the next bitcoin through diversification (over 30 positions out of over 500 possible cryptocurrencies in the market). No position is allowed more than 15% of the total portfolio. Their returns are supposedly not correlated with the price of bitcoin and does not use leverage, margin, or short-selling.
In order to draw in new investors, they do not charge fees for the first year (under 500k). Their target market are High Net Worth Individuals and institutions who are unfamiliar with the cryptocurrency markets. Their selling point is the inflation of the dollar and the collapse of the current monetary system.
Here is a link to an article from ZeroHedge with their whole spiel.