BarclayHedge: Top 5 Crypto Fund List Includes 2 from Sarson Funds

In a release from CryptoFund.News, BarclayHedge‘s April 2020 list of best performing crypto funds was announced, with Sarson Funds leading the pack, occupying 2 of the top 5 spots.

Sarson Funds’ flagship Large Coin strategy, Blockchain Momentum LP, was number 3 on the list, up 36.02%, which was just behind Pantera Capital’s Pantera Bitcoin Fund at 36.94%.

Fifth Khagan, LP, the Small Coin (aka AltCoin) strategy was number 5 on the list, up 33.62%

Read the full list and article HERE.

PWC Report: Global Crypto AUM Doubles

PwC’s 2020 Crypto Hedge Fund Report highlights a Remarkable Year for Crypto Funds.

Faith in crypto is surging. In its continued emergence as a store of value asset class in the face of COVID-19, cryptocurrency investors have continually sought new ways to profit off of the emerging market. According to Price WaterhouseCoopers (PwC), an Enterprise Ethereum Alliance member, and Elwood Asset Management’s 2020 Crypto Hedge Fund Report, crypto hedge funds have experienced the recent momentum of digital assets, as they report an estimated doubling of crypto AUM across the world’s most successful digital asset investing institutions.

The report states, “by sharing these insights with the broader crypto industry, our goal is to encourage the adoption of sound practices by market participants as the ecosystem matures.” A  heightening trust and maturing industry is surely displayed in their findings.

The report surveyed the world’s largest crypto hedge funds by AUM and found that global AUM has increased from $1 billion USD to over $2 billion through the past year. Also highlighted was an increase in the average and median AUM of these funds, with both measures doubling by year end as crypto funds’ average AUM was recorded at $44 million with a median of $8.2 million. The percentage of crypto funds managing at least 20 million AUM also experienced significant growth this year, rising from 19% in 2019 to 35% in their most recent results.

In lieu of crypto’s recent success, Henri Arslanian of PwC in a meeting with crypto news source The Block, said that “The changes the crypto hedge fund industry has seen in the past 12 months, from additional regulatory clarity to the accelerated implementation of best practices, are great examples of how fast the industry is becoming increasingly institutionalized.”

Fund Emergence Correlated with Bitcoin Price Activity

According to the report, the emergence of crypto hedge funds has closely followed the swings of bitcoin, as 40% of funds emerged following the 2017 all-time high and the slowed growth of new funds following the crypto winter in early 2019.

With such correspondence, the report recognizes that of all the holdings of these funds, 49% of daily trading is allocated towards Bitcoin, while 97% of these funds actively trade the asset in their investment strategies.

Among the top altcoins traded by these companies, 67% of funds reported to trade Ethereum (ETH), 38% traded both Ripple’s XRP and Litecoin (LTC), while 31% traded Bitcoin Cash (BCH). The depth of activity and attention that altcoins like these are receiving alongside Bitcoin within investment vehicles displays the maturation of digital assets that PwC and Elwood referred to in their report.

Common Investors and Investment Vehicles

PwC and Elwood also reported that 48% percent of crypto hedge funds are owned by family offices, while 42% are under the umbrella of high-net-worth individuals. A rather notable measure is that venture capital funds make up just over three percent of crypto funds, displaying an unexpected underperformance in a sector that many would hope to greater embrace the momentum of blockchain technology.

Within the hedge funds reported, PwC and Elwood found that there are generally four types of crypto investment strategies, these being:

    • Discretionary Long Only (funds with a long term investor lock-up),
    • Discretionary Long/Short (funds that take long and short strategies such as asset reallocation following industry events and technical analysis),
    • Quantitative (liquidation backed strategies including arbitrage and market-making), and
    • Multi-Strategy (combined strategies from the other three categories). Of these investment strategies, the most widely utilized are quantitative strategies, occupying almost half of all investment vehicles.

In the past year, the quantitative strategy was also the highest performing for surveyed funds, returning an average of 58% on the year, giving sense to why it is the most widely utilized approach. The Discretionary Long Only strategy acquired a 42% return, the Long/Short strategy tallied a 33% return, and the Multi-Strategy approach returned 19% on the year.

Breaking Down Investment Strategies

To further examine the quantitative strategy heavily utilized by crypto firms, PwC and Elwood also reported on the liquidation activities involved in the quant approach. Within their quantitative strategy, 56% of funds trade crypto derivatives, 48% actively short crypto assets, 38% engage with cash-settled futures, and 31% utilize options. Additionally, 42% of companies reported to engage in staking, 38% in lending, and 27% in borrowing.

Conclusion

While the asset class continues to mature, the findings of PwC and Elwood Asset Management mark 2019 as a tremendously successful year for crypto and the influx of capital into its’ associated investment funds. As attention has been brought to Bitcoin in the recent months, Sarson Funds is hopeful that while 2019 was a productive year, 2020 capital inflow will outperform the past year, especially with Bitcoin’s recent halving attracting larger than ever support for the asset class.

 

Faith in Crypto Surges in COVID-19 Economy

Bitcoin rang in 2020 as the highest yielding asset of 2019 and the previous decade, marking a 93.8% return for 2019 and an astounding return of 8,900,000% for the decade. Such a high yield is jaw-dropping in comparison to other investments, and thus, brought much-deserved attention and respect to the cryptocurrency space. As the COVID-19 pandemic has revealed significant insecurities in our financial system, investors have been given yet another significant reason to look elsewhere for financial security.

The Tokenist, a cryptocurrency news source, recently published an article revealing compelling data that Bitcoin is gaining popular ground amongst traditional store of value assets, gold included in that measure. Using data recorded in 2017 on Bitcoin user adoption and comfortability, the site issued a series of polls interviewing thousands of people across 24 countries in April 2020 to measure how the public’s attitude toward bitcoin has changed over the years, especially as a result of COVID-19.

The report finds that “faith in large financial institutions has been steadily waning for more than a decade, and the COVID-19 pandemic has only accelerated the process,” which shifts over to Bitcoin, which was implemented following the 2008 recession as a way to unite the world in financial freedom against the big banks that had caused so many to suffer.

Within the surveys taken, there was also significant indication that bitcoin was gaining ground as an emerging long-term store of value. Bitcoin, often referred to as “digital gold,” has very much followed Gold’s path to universal acceptance.

In its infancy, Gold experienced very volatile early years, causing investors to question its dependability, later stabilizing and becoming one of finance’s core assets. Many bitcoin experts are expecting the digital asset pioneer to do the same, says an article published earlier this year by Sarson Funds.

In support of Bitcoin’s emergence as a store of value asset, The Tokenist found that 45% of those who took the survey preferred bitcoin as an investment over stocks, real estate, and gold, revealing an increase in populous sentiment of 27% in favor of Bitcoin since the 2017 study. 47% of respondents also reported to favor Bitcoin over big banks, showing a 29% increase since 2017.

The study also found that while preference towards Bitcoin might be lower when examining the whole participant pool, millennials are reporting significant favor of the digital asset along with belief in a universal adoption of the currency. In fact, 59% of the survey’s millennials believed that a universal adoption will take place over the next decade, while 25% of millennials reported that they had no problem with the intangibility of digital assets.

To extend on the notion of universal adoption, in examining the historical trends of the world’s most popular technologies, universal adoption of blockchain technology, the foundation of Bitcoin, is not unrealistic.

As blockchain technology continues to showcase itself on the world stage through cryptocurrencies, it is important to keep in mind the growth structure of previous widely-adopted technologies, such as the telephone, radio, cellphone, and internet, pictured above.

History proposes that adoption of technology traditionally follows an “S shape” function, predicting that the adoption of blockchain technology and Bitcoin as its pioneer could also follow suit.

Enterprise Ethereum Alliance: Winner Taking All

At Sarson Funds we have taken up the mantle on educating Financial Advisors on what we believe is shaping up to be a seismic shift in global financial infrastructure (from which the United States is neither exempt nor primary based on the current trajectory).

Cryptocurrencies like Bitcoin may serve as easy punching bags for critics; however, the rapid adoption of standardized blockchain technology solutions, specifically Ethereum based solutions, are changing the conversation.  Now the conversation is not a question of if  this transformation will take place, but when.

The accelerated growth of the Enterprise Ethereum Alliance underscores the reality that multinational companies are staffing their R&D departments with blockchain technology analysts and are joining forces in the name of efficiency.

If you haven’t done a deep dive on the Ethereum blockchain and what its massive applications can be, give us a call. We would love to share with you why we allocate to Ethereum for our clients and how accredited investors have a unique opportunity to make significant additional return on a passive Ethereum investment by taking advantage of US exchange arbitrage opportunities.

Ask us how! ($250K minimum investment amount; 1 year minimum holding period)

Ready for US Markets, Korean Blockchain Hardware Firm Medium Signs MOU with Sarson Funds

Medium CEO Panjong Kim (left) and Sarson Funds CEO John Sarson (right, on screen) following the MOU signing via Zoom.

The agreement solidifies the shared opinion about the importance of hardware-based blockchain technology in the emerging global blockchain ecosystem.

INDIANAPOLIS, IN / APRIL 27, 2020 / Blockchain hardware firm Medium and blockchain investment education firm Sarson Funds signed a memorandum of understanding (MOU) last Wednesday (April, 22, 2020), in a signing ceremony hosted via Zoom with attendees from Medium’s Seoul, Korea headquarters and Sarson Funds’ offices in Indianapolis and Boston.

After experiencing rapid growth in the Asian market, Medium is now geared to expand into the US cryptocurrency and blockchain investment market. The agreement solidifies the shared opinion about the importance of hardware-based blockchain technology in the emerging global blockchain ecosystem.

Click here to view the full interactive multimedia news release.

Key Takeaways

  • Korean blockchain technology hardware firm Medium expands into US market, signing MOU with Sarson Funds.
  • The MOU highlights the growing importance of hardware-based blockchain technology in the emerging global blockchain ecosystem.
  • Sarson Funds to provide critical market research, technical analysis, and communications resources to support Medium’s outreach to US blockchain and cryptocurrency investors.

As Markets Fall, Financial Advisors Seek Cryptocurrency Regulatory Clarity Amid Crypto-Lobby Infighting

Sarson Funds Managing Partner Jahon Jamali speaks on Capitol Hill at the introduction of the Crypto-Currency Act of 2020.

Financial advisors support the Crypto-Currency Act of 2020, as stonewalling from cryptocurrency advocacy groups threatens to derail digital asset oversight legislation.

WASHINGTON, DC / March 20, 2020 / Days before coronavirus sparked a financial market meltdown, a piece of legislation introduced to the Congress last week offered a start at providing Americans with a chance to more clearly and safely consider a new alternative form of investing – cryptocurrencies. Sarson Funds, a cryptocurrency investment and education firm, lauded the bill’s efforts, as in recent days cryptocurrencies have risen sharply following their mutual sell-off alongside Wall Street.

Click here to view the full interactive multimedia news release.

Key Takeaways

  • As crypto markets brace financial storm, financial advisors voice support for the Crypto-Currency Act of 2020.
  • Lack of bill support from DC-based crypto advocacy group with ties to cryptocurrency media outlet seen as a setback for digital asset investors.
  • Sarson Funds: The blockchain wars have started and China is winning.

How to Trade Bitcoin During the Quarantine

Executive Summary: Don’t use Bitcoin to play a bounce in crypto, use Ethereum instead.

Cryptocurrency markets fell as much as 45% recently as investors looted their digital wallets to satisfy margin calls and capitalize on steep price declines equity market.  Bitcoin, which still represents 65% of the entire market, is down over 35% from where it had consolidated around $10,000 just 30 days ago.

Given the global liquidity spigots being turned on in response to the crisis one could be forgiven for thinking that higher prices may seem inevitable. Bitcoin and its “anti-fiat” cryptocurrency alternatives were, after all, spawned as a protest to the bailouts and money printing of the last financial crisis.  But there is reason to approach today’s market with caution.

Yes, crypto is cheap, but two popular coins of note – Bitcoin (BTC), Bitcoin Cash (BCH) – are likely to get cheaper and here is why. 

Each coin is only 8 days away from potentially seeing a major influx of supply as the bankruptcy trustee for the infamous Mt. Gox – the OG of crypto hacks, thrice delayed – finally returns to eager sellers 150,000+ Bitcoin and 200,000+ Bitcoin Cash tokens.  These coins have been held in escrow during excruciatingly-slow liquidation proceedings but will soon finally be returned to depositors who have been waiting for 5-long years (since Bitcoin $750) to be returned what was left of their holdings.  At today’s prices, the Bitcoin scheduled to be distributed on March 31st will have a current value of over $1 Billion USD.   

Let’s slow down and say that again:  In 8 days, $1 Billion dollars’ worth of Bitcoin could potentially enter the market.

Should only 25% of claimants decide to sell their Bitcoin – and we believe that more than that will – over $250 million of sell orders for Bitcoin will soon be hitting the market.  Bitcoin’s liquidity starved market cannot digest this volume of sell orders without a negative impact on the price. 

So, what’s an investor looking to capitalize on crypto market dislocation to do?  We suggest, instead of loading up on Bitcoin or an index fund (remember the index is 65% Bitcoin), that you use this opportunity to build a position in the often misunderstood and under-owned original smart contract coin: Ethereum (ETH).

Reasons to Long Ethereum:

Recently, and to little fanfare, the Enterprise Ethereum Alliance grew its already impressive roster of member companies by adding JP Morgan (who is folding in their digital currency project Quorum) and Ernst & Young. They join over 100 other well respected industry leaders such as Intel, BP, Microsoft, UBS, PWC, State Street, AMD, Broadridge, Marsh and McClellan and others who have gone public with their commitment to developing on the Ethereum blockchain.  No other cryptocurrency project has anywhere near this level of coordination and industry commitment.

Beyond the Enterprise Ethereum Alliance and its incredible roster, investors should also expect positive price moves from Ethereum as its development team grabs headlines in the coming months with the launch of Ethereum 2.0.  Ethereum 2.0 is a massive and much anticipated protocol upgrade that will position Ethereum back at the top of the cryptocurrency world in technological capabilities.  It is scheduled to launch in July of 2020, and is expected to put to rest any concerned about Ethereum’s scalability and capabilities.

As far as today’s price as a fair entry point, Ethereum has taken even more damage over the past month than Bitcoin.  During the panic selling of the past few weeks Ethereum has seen its price fall from a high of $280 in late February to around $135, down more than 50% from its recent high and represents bargain in our opinion, especially when compared with higher priced alternatives that face major supply concerns in the near term.

Love Bitcoin Later    

Yes, we still love Bitcoin. Yes, the “halvening” is happening in May and yes, it will be a major positive for the currency as it will reduce new Bitcoin supply to the market by 50%.  We also have every confidence that once the world moves on from COVID-19, central banks (starting with China) will resume the announcing of blockchain-backed digital currencies.  These CBDCs (central bank backed digital currencies) will, by necessity, rely on trading pairs with Bitcoin to facilitate trading compatibility on day one of their launches, taking advantage of the 180+ bitcoin-fiat currency pairs that are already existing worldwide.  The role of Bitcoin in the global economy is real and unchanged – we are not suggesting any love loss for the world’s leading digital asset, we are just suggesting that there is a lot of supply headed into the market and that for those wishing to play a bounce in cryptocurrencies, Ethereum appears to be the more attractive investment vehicle in the near term.

Large Coin Fund Makes BarclayHedge’s Top 5 Crypto Fund List

For Immediate Release: 

Sarson Funds is pleased to announce that BarclayHedge has named our Large Coin Fund, Blockchain Momentum LP, to its list of Top 5 performing cryptocurrency hedge funds for January 2020.

Please visit www.BarclayHedge.com for full list and rankings

ABOUT OUR LARGE COIN FUND – BLOCKCHAIN MOMENTUM LP

BLOCKCHAIN MOMENTUM, LP’S PROPRIETARY RULES-BASED INVESTMENT PROCESS IDENTIFIES POSITIVE PRICE MOMENTUM AND SPECIFIC PRICE TRENDS TO STRATEGICALLY ALLOCATE CAPITAL TO THE 10 LARGEST CRYPTOCURRENCIES.

LEARN MORE ABOUT BLOCKCHAIN MOMENTUM HERE.

March Crypto Market Update – 2020

What an exciting start to the year for investors in cryptocurrency and traditional assets alike. I am immediately reminded of the Chinese fortune that can be simultaneously interpreted as both a curse and a blessing: “May you live in interesting times.” Indeed!

Stumbling into spring like a drunken adolescent, Bitcoin and its fellow cryptocurrency troublemakers have kept us entertained and well fed so far in 2020 with our flagship fund Blockchain Momentum up as much as 60% at one point this year before pulling back in the last several days.

In Bitcoin’s case, January sparked a rally of over 40% for the world’s most popular cryptocurrency. Life rushed back into nearly all blockchain technology projects, with marquee protocols like Ethereum and Ripple doubling within a 5-week span. It seems safe to say, that after 26 long months, we can finally close the door on the crypto bear market of 2018-2019.

A View of Viral Volatility

Traditional and cryptocurrency markets witnessed disruption recently, with investors concerned about the impact on the global economy due to the Coronavirus. Bitcoin did not respond as a safe haven asset as some had hoped, falling 15% (about in line with global equity markets).

Bull Market Brewing

However, there are positive fundamental signs for the cryptocurrency markets that should be considered with active bitcoin wallets reaching all-time highs and global trend search interest in Bitcoin peaking this month at levels similar to those in June of 2019 when Bitcoin reached $13,890.

There are reasons to be optimistic as Bitcoin’s growth continues to boom around the world. Too many countries to count have now passed clear cryptocurrency regulations and are seeing their private sectors incorporate blockchain technology-powered cryptocurrency solutions into their business plans.  

A Step Toward Crypto Regulatory Clarity

This pro-active approach is still not visible in the United States, not yet anyway. However, it appears that the United States will deliver on cryptocurrency regulations in the not-too-distant future.

Cryptocurrency Act of 2020

While presidential hopefuls like Mike Bloomberg have outlined thoughtful cryptocurrency regulation, it seems that we might not need to wait for a new administration  for US cryptocurrency guidelines. Recently, several pieces of cryptocurrency regulation have been proposed to both houses of Congress, the most viable of which appears to be from Congressman Paul Gosar R-Arizona

Click to read the language of the “Crypto-Currency Act of 2020” bill or view our firm’s infographic.

We love that this proposed legislation does not create any new government, but instead assigns Tokens into three broad categories, assigning an existing regulatory body for oversight. The “business side” of the crypto community wholeheartedly embraces these regulatory proposals coming from Congress.

We are ready to shed crypto’s infamous “bad-boy” image and welcome in a new era of “Crypto Clarity”. #cryptoclarity #sarsonfunds 😊  We believe that 2020 has more positive moments ahead for crypto investors!

Warm regards,

John Sarson and the Sarson Funds Team