Reality Shares Set To Launch $100 Million Crypto Hedge Fund, After Its First Ever Blockchain ETF

Omar Faridi
  • Asset management firm Reality Shares is planning to launch a $100 million crypto hedge fund.
  • The investment firm's new crypto hedge fund announcement follows the successful launch of its blockchain-ETF in January.

Reality Shares, an asset management firm and blockchain exchange-traded fund (ETF) issuer, is reportedly planning to launch a $100 million crypto hedge fund.

Notably, soon after the small asset manager introduced its blockchain-ETF (Reality Shares Nasdaq NexGen Economy China ETF) in January, the investment company’s assets under management increased by over $100 million.

Over 100 Crypto Hedge Funds In 2018

According to a source working closely with the privately owned firm, $25 million has been committed so far to the crypto hedge fund, which is capped at $100 million. Reality Shares’ fund preparations come at a time when over 100 cryptocurrency hedge funds are expected to be launched in 2018, as noted by Crypto Fund Research.

Despite the crypto market shedding over $600 billion since January, it appears that the capital pouring into the volatile digital currency ecosystem is still on track to match, or even exceed, the 150+ crypto hedge funds launched last year.

Additionally, Business Insider noted that California-based Reality Shares’ crypto hedge fund will be “a mix of arbitrage, venture, and directional strategies” and it will join a market of over 366 crypto-asset funds. Moreover, the $100 million investment is also part of the asset manager’s focused expansion efforts into the crypto market.

Only 28 Crypto Hedge Funds Over $100 Million

While it might seem that there is considerable investor interest, the crypto industry is still “really struggling” with capital, as pointed by blockchain investor Meltem Demirors. Notably, a closer look at the numbers by Crypto Fund Research indicates that only 28 crypto hedge funds currently have over $100 million under management.

But when looking at the bigger picture, the entire market capitalization of the crypto market was only around $20 billion in January 2017. Since then, the total market cap of all cryptocurrencies has increased by 10x to currently over $200 billion. However, many market watchers such as Goldman Sachs’ investment advisors have said that cryptocurrencies “will not retain value”, as its recent economic-outlook report tended to focus more on the significant drop in crypto prices, after reaching all-time highs in December 2017.

Wall Street Firms Getting Serious About Crypto

Interestingly, even though Goldman Sachs has been critical of digital currencies, it is still reportedly planning to launch a crypto trading desk. Meanwhile, Intercontinental Exchange (ICE) also recently announced that it will be launching its own digital asset trading platform called Bakkt.

These developments will be encouraging to the crypto-economy at a time where crypto-assets are sliding across the board, as it suggests that traditional financial market institutions are beginning to take the industry more seriously.

As Tether Premium Disappears, Bitfinex and Ethfinex Launch New IEO Platform: Tokinex

Avi Rosten

Prominent exchanges Bitfinex and Ethfinex have announced a new IEO (Initial Exchange Offering) platform.

The new platform, Tokinex, allows users to participate in pre-vetted token sales from new projects listing on the site. In a departure from other similar offerings such as Binance Launchpad, token issuers on Tokinex don’t have to pay any upfront fees for listing, while successful launches on the platform will also benefit from listing on both Bitfinex and Ethfinex.

The new exchange also utilizes the KYC service from Blockpass, which allows customers to complete KYC verification but without storing data on the exchange. The first token sale will be announced on May 23rd, with the sale taking place on 13th June.

Will Harborne, founder of Ethfinex, told CryptoGlobe:

Tokinex has been several months in development, incorporating feedback, testing and learning to reach a quality level users have come to expect at Bitfinex and Ethfinex. It has been carefully crafted to put the user experience front and centre, from incorporating Block Pass for KYC that is easy to use and does not store personal data, to being able to contribute existing assets directly from the user’s own wallet, rather than having to purchase a native platform token to participate.

IEOs in 2019

This latest platform from Bitfinex adds to the growing list of IEO platforms that have followed Binance, including OKEx, Huobi and Bittrex.

For Bitfinex, the news comes in the aftermath of fraud allegations in April from the New York Attorney General against Bitfinex and Tether, over alleged losses of over $850 million. However, the Tether Risk Premium, - a measure of how much the market believes Tether to be riskier than its underlying USD - has since almost completely disappeared, suggesting that investors at the moment have little concern over Tether’s value.

This is likely due to restored investor confidence in Bitfinex and Tether, after Bitfinex CTO Paolo Ardoino revealed on May 13th that the company had raised $1 billion in a private token sale. The chart below shows the impact of the announcement - with the premium on the BTC price on the Bitfinex Exchange narrowing to zero following several weeks where bitcoin was trading above its spot price.

Bitfinex Premium Narrows