Firm Offers Bitcoin Hedge Fund

Mar 12 2013 | 12:14pm ET

Four years after the debut of the bitcoin, a Maltese firm has launched a hedge fund investing in the digital alternative currency.

Hedge fund platform and brokerage Exante has raised US$3.2 million for its Bitcoin Fund, it told Forbes. While Exante's Anatoliy Knyazev said last year that he hoped his firm's would be "the first hedge fund to take advantage of using bitcoins," the fund is less a hedge fund and more a vehicle that allows institutional investors to invest in bitcoins. The fund simply buys the peer-to-peer crypto-currency, arguing that its value will increase as more and more people use it. The fund is denominated in dollars and euros, allowing institutional investors who would not be permitted to buy bitcoins themselves to access the market.

The Bitcoin Fund's fees are also very unlike a hedge fund's: It charges no performance fee and only 0.5% for management, a fee that is paid monthly and used to cover security costs for the fund. There is also a 0.5% subscription fee.

At the moment, the fund is not available to U.S. investors; Knyazev told Forbes, "the U.S. jurisdiction is tricky." He did say that Exante is looking into creating a feeder fund in Delaware that would open the Bitcoin Fund to U.S. clients.

The Bitcoin Fund requires a US$100,000 minimum investment.

The monetary base of bitcoins is currently estimated to be more than US$400 million, making it the most widely-used alternative currency in the world. Critics have claimed it is a Ponzi scheme due to its strictly-limited inflation program, which is set to run until 2140.


In Depth

Part II: Roubini Talks Risk, Recovery And The Threat Of A Triple Dip Recession

Oct 21 2014 | 12:41pm ET

In the second half of our interview with Nouriel Roubini, FINalternatives editor...

Lifestyle

Balyasny Pays Over $6M For Lakefront House

Oct 22 2014 | 10:29am ET

A venture headed by hedge fund manager Dmitry Balyasny just paid $6.2 million for...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

Demeter: Family affair

David and James Hamman launched their fundamental Livestock and Grains Program in March of 2010 but it really was decades in the making.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.