• How Two Prime’s Crypto Fund Outperformed Bitcoin in August

  • According to a PwC report, total assets under management (AUM) of crypto hedge funds globally increased to nearly $3.8 billion in 2020 from $2 billion the previous year.

    The fund, which manages $40 million in assets, saw year-to-date returns of 183 percent (net of fees) through the end of August, compared to bitcoin’s raw gain of 62 percent. According to a source with direct knowledge, the fund’s trailing 12-month returns through August 31 increased 537 percent (net of fees) compared to bitcoin’s 313 percent rise. According to an investor deck, the Digital Assets Fund hedges net long BTC and ETH delta exposure with a derivatives overlay.

    According to the PwC report, the median cryptocurrency hedge fund gained 128 percent last year and 30 percent in 2019. This year’s surveyed funds’ average AUM increased to $42.8 million from $12.98 million.

    “Despite the recent news of China banning crypto… again, options skews on ETH and BTC are still leaning bullish for the majority of the durations into the end of the year and the beginning of next year,” Two Prime Chief Investment Officer Nathan Cox said via Telegram.

    The fund announced that it will raise the performance fee for new investors in the Digital Assets Fund to 16% from 10% beginning in January. The fund’s management fee of 2% will remain unchanged.

    Alexander Blum, the managing partner of Two Prime, which also runs another fund called Liquid Yield Fund I, founded the firm.

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