Silver Castle Ltd., an Israel-based cryptoasset investment firm for institutional investors, has introduced two new digital asset funds, and it’s expecting $50 million worth of assets under management (AUM) by the end of 2018.
Despite the extended crypto bear market, Silver Castle is among one of the relatively few firms that has chosen to launch new initiatives.
At present, there are over 370 crypto funds - which collectively manage nearly $10 billion in virtual assets, according to Autonomous Research. Although this might seem like a substantial amount for the nascent cryptoasset ecosystem, it’s insignificant when compared to the multi-trillion dollar traditional investment sector.
New Crypto Funds Enter Highly Volatile Market
As explained by Bloomberg, Silver Castle’s first fund is based on a trading algorithm that tracks short- and long-term market momentum - while also selecting the five largest cryptocurrencies in terms of market cap (when trading).
Silver Castle’s second fund is “fully invested”, automated, and consists of the top 10 digital currencies by market cap.
Importantly, leading professional services firm, KPMG, published a research report in which it noted that the crypto space is currently saturated with mainly speculative investors. KPMG also classified cryptoassets as very high risk investments that cannot function effectively as a store-of-value - mainly because their underlying technology is in its initial stages of development.
Focusing On Security
Commenting on the concerns raised by institutional investors regarding the volatile nature of digital assets, and the lack of proper custodial solutions, Eli Mizroch, the CEO of Silver Castle Digital Currency Investment Group, said:
We spent close to a year building robust infrastructure for managing other people’s money at the level of institutional grade with very, very high security.
Similar to how many crypto startups have been established by veteran traditional market professionals, Zvi Ziv, the former CEO of Israel’s largest financial institution, Bank Hapoalim, has joined Silver Castle as its board chairman.
Gabriella Ravid, the founder and former CEO of Israel’s largest investment fund, the Psagot Ofek Investment House, has also joined Silver Castle Ltd.
Expressing his excitement over Fidelity Investments’ entry into the digital asset market, Mizorch remarked: “[It] is awesome for everybody.”
According to Startup Nation Central (an Israeli organization that monitors the progress of local startups), there are currently 129 crypto-related firms in Israel - which is significantly more than only 42 that existed back in 2015.
Moreover, there have been about 40 initial coin offerings (ICOs) that have been launched by Israel-based companies, Mizroch noted.
Traditional Financial Market Players Launching Crypto Exchanges
As CryptoGlobe reported recently, former executives from Danish financial institution, Saxo bank, have launched Covesting, a Europe-based digital asset exchange. Only Covesting’s “soft launch” version of its crypto exchange is available at this time, as it must undergo further testing and refinement.
The ongoing development of Covesting’s exchange (mainly in Gibraltar) also appears to be focused on offering a high level of security and adhering to strict regulatory requirements - both of which are necessary in order to attract institutional investments from accredited investors.