Frequently Asked Questions
Answers to your crypto questions
Cryptocurrencies and digital assets are evolving every day. Got crypto questions? We have crypto answers.
Sarson Funds FAQ's
Digital Assets have historically shown low correlation to bonds, stocks or any other traditional assets. The Federal Reserve has described digital assets as a brand-new asset class and is intrigued by the innovation the asset brings to finance. Historically, cryptocurrencies have yielded strong Sharpe ratios over multi-year periods (High Sharpe ratios indicate high levels of investment return for the amount of risk taken.) When incorporated into an investment portfolio, digital assets may help increase an investor’s overall diversification due the historically low correlations that cryptocurrencies have had with traditional asset classes.
One of the most liberating features of cryptocurrencies is that wherever you are in the world, regardless of your social, political or economic status, as long as you are able to access the internet (on a computer, smart phone or in an internet cafe) you can discover, trade, buy, sell, send, and exchange cryptocurrencies. There is no need to have a bank account at a brick and mortar bank or even have identification. Cryptocurrencies are peer-to-peer networks that seek to remove as many barriers to entry as possible. This can be seen as one of cryptocurrencies biggest strengths but also one of its biggest weaknesses. Because there is “trusted central authority” overseeing transactions in Bitcoin and many other cryptocurrencies, there is no one to turn to for help or when errors occur. It is possible (and has happened many times) that entire accounts containing valuable cryptocurrency can be misdirected, stolen and/or lost forever with no chance of recovery. Sometimes these losses can be the work of criminal organizations, while other times the losses can be the result of human error or oversight. Because cryptocurrencies lack the consumer protections that we have come to take for granted in many of our other financial dealings, we recommend that investors not put large amounts of money into cryptocurrency until they have familiarized themselves with the unique features of the asset class and fully understand ways to avoid the most common cryptocurrency mistakes. We have published this guide to share some of the best practices that we implement at Sarson Funds and recommend anyone investing in cryptocurrencies on their own to also implement.
Check out the Sarson Funds Guide to Secure Cryptocurrency Investing.
We believe that learning how to buy, sell and trade cryptocurrencies is important for all investors. We encourage all of our clients and prospects to open an account with a US-based cryptocurrency exchange (Coinbase, Bittrex and Gemini are the largest three) as part of their individual crypto learning process. Just as understanding how to trade stocks and having experience doing so helps make us better investors and more informed about when it’s appropriate to work with a Financial Advisor or to utilize an equity manager (like a mutual fund manager), the same is true for digital asset investing.
It’s a common misconception that Blockchain Technology and cryptocurrencies are separate. They are one in the same. Cryptocurrencies are Blockchain Technology’s first “Killer App”.
The immutable transaction ledger (the blockchain) is written into existence with the movement of coins or tokens from one person or category to another.
Think of the blockchain ledger as a long scarf that grows longer with each transaction. The coins act as the knitting needle that pulls the thread (transaction history) as coins are sent from one wallet to another. The movement of coins creates the transaction history that becomes the scarf (the blockchain). Users create the transaction ledger (the blockchain) by moving coins or tokens back and forth between designated participants of the network. As the numbers of transactions grow, so too does the size of the blockchain scarf!
There are many use cases for cryptocurrencies, however, on a macro level, two use cases are in high demand. In countries where governments poorly manage their money supplies and create hyperinflation, the citizens of these countries have protected their wealth by moving commerce into cryptocurrencies.
You can see this in Venezuela and Africa in this world-wide heat map of cryptocurrency from: Coin Map.
Businesses and individuals needing to send payments across international borders have also become strong supporters of cryptocurrencies because they offer international remittance capabilities that are faster and less expensive than current methods.
There are lots of great resources on the web and even worthwhile documentaries on Netflix that can deepen your understanding of cryptocurrencies. We focus on delivering unbiased education and recommend visiting our Education Section as well as downloading our Cryptocurrency 101 brochure available HERE.
Visit our YouTube Channel for a more immersive experience, where you can find investor education video lists.
The Large-Coin Strategy, Blockchain Momentum, LP is only available to investors or entities that are qualified purchasers, typically defined as those with a net worth of $2.1mm or greater. The Small-Coin Strategy, Fifth Khagan, LP, the Crypto & Income Strategy, AX Momentum, LP, the Smartcrypto 15 Index, LP and the Stablecoin Index, LP are only available to investors or entities that are classified as “Accredited Investors,” defined as those with a net worth outside of their primary residence of $1mm or greater, or that satisfy other income related criteria, specifically earning $200,000 or more annually in each of the last two years, and an expectation for similar income going forward (This number is increased to $300,000 for married couples filing jointly).
The fees for the Sarson Funds cryptocurrency investment funds are below:
1. Blockchain Momentum, LP has a 2% management fee and a 20% incentive allocation.
2. Fifth Khagan, LP has a 2% management fee and a 20% incentive allocation.
3. AX Momentum, LP has a 2% management fee and a 20% incentive allocation.
4. Smartcrypto 15 Index, LP has a 2% management fee.
5. Stablecoin Index, LP has a 2% management fee.
Management fees are calculated and billed on the calendar quarter in advance. The incentive allocation for Blockchain Momentum, LP is calculated and billed annually. The incentive allocation for Fifth Khagan, LP and AX Momentum, LP are calculated and billed quarterly.
The minimum account size to invest in any strategy distributed by Sarson Funds, LLC is $50,000 USD. In certain instances, or at certain times, the General Partner may waive or modify the minimum investment and stated fee requirements by issuing a “side letter” amending the Limited Partnership Agreement. All minimum investment waivers and fee modifications are determined on a case-by-case basis at the sole discretion of the General Partner.
Yes, Sarson Funds currently works with two third party custodians, Millennium Trust and Midland IRA, for IRA investors.
The fund’s NAV is calculated daily by our administrator. Clients are provided a login ID so they may see the changes in their account value on a daily basis.
Yes, new investments may not be withdrawn for 90 days. After 90 days partial and full withdrawals may be made on the last calendar day of the month with 30 days’ notice.
The strategy for Blockchain Momentum, LP is rules based and does not sell due to valuation by itself or in the same way that an actively managed fund like our Small-Coin strategy (Fifth Khagan, LP) may. Blockchain Momentum, LP does use RSI (Relative Strength Indicator) as a technical input into each of the 10 individual algorithms that are used to determine if a specific large-cap cryptocurrency holding has a full or half-weighting in the portfolio. RSI is used to identify whether a position is over-bought or over-sold in the short term. A buy or a sell signal triggered by a holding’s algorithm could occur any day of the month based on the signals in the market, only buys and sells that are determined by the monthly rebalance/reconstitution calculation process happen exclusively on the first day of the month.
Clients are allowed free exchanges between investments on the Sarson Funds platform at the end of each calendar quarter without being charged a transfer fee.
Any client looking to transfer between funds must notify Sarson Funds within 30 days of the end of the calendar quarter that they wish to exchange and they must complete any and all additional paperwork associated with their new investment choice to the satisfaction of the administrator prior to the first day of the new calendar quarter.
All fees and incentive allocations that are accrued but have not yet been paid to the client’s current investment manager will be calculated by the administrator at the time of transfer and will be automatically withheld from transfer proceeds.
Clients are allowed monthly withdrawals and quarterly exchanges with 30 days’ advanced notice to Sarson Funds. There are currently no provisions in our documents addressing retractions of withdrawal or transfer requests and as such any such request to cancel or modify a withdrawal or transfer before it has been processed will be handled on a case-by-case basis at the sole discretion of the General Partner.
The Sarson Funds team is a world class amalgamation of Wall Street Managers, Engineers, Bankers, Data Scientists, and Silicon Valley entrepreneurs. We maintain a fiduciary standard at all times which means that we put our client’s best interests ahead of our own.
We work with industry leading Registered Investment Advisors and seasoned cryptocurrency professionals that deliver products that offer targeted exposures while remaining transparent and focused on risk management.
Our investment managers have been managing crypto-related investment vehicles since Dec. 2016.
Sarson Fund’s research and market foresight has allowed us to assist our managers in defending our client assets during periods of market turmoil while still participating in the investment opportunities created by this emerging asset class.
Sarson Funds’ unparalleled network of “Blockchain Insiders,” which is comprised of cryptocurrency traders and portfolio managers from around the United States and Asia, has been able to consistently identify investment opportunities and avoid danger on behalf of Sarson Funds’ investors. With the active assistance of our unique manager network, we and our investment managers are able to identify and monitor numerous emerging digital assets that are disrupting traditional business around the world.
Sarson Funds presents talks around the United States to other cryptocurrency managers and financial professionals on best practices in security protocol, AML and KYC compliance. These presentations also showcase the importance of understanding and anticipating industry regulation and coming legislation. Sarson Funds completes its world class boutique investment experience by offering Limited Partners online account access, daily performance reporting, 30 day liquidity, daily onboarding and low investment minimums. Furthermore, Sarson Funds’ emphasis on transparency and safety protects investors with a $1mm USD cyber-theft insurance policy underwritten by Berkshire Hathaway.
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