Tuesday, October 3, 2023
    HomeAltcoinThis Hong Kong Fund Could Deploy Over $50 Million on Altcoins

    This Hong Kong Fund Could Deploy Over $50 Million on Altcoins


    HashKey Capital, a subsidiary of Hong Kong’s crypto juggernaut HashKey Group, is launching a fund on Friday with an uncommon focus — second-tier cryptocurrencies, colloquially often known as “altcoins.”

    This gamble veers away from the normal funding method dominated by Bitcoin and Ethereum. It goals as a substitute to capitalize on lesser-known digital property’ high-reward, high-risk nature.

    HashKey Capital Targets Untapped Alpha

    Portfolio supervisor Jupiter Zheng, the strategist behind HashKey Capital’s fund, targets an investor base of high-net-worth people and corporations catering to rich Asian households. In keeping with Zheng, the crypto market has an untapped demand for above-average returns, or what funding professionals time period ‘alpha.’

    In a local weather the place Bitcoin and Ethereum have grow to be virtually standard funding routes, the search for alpha leads HashKey Capital down a less-traveled path.

    Learn extra: What Are Altcoins? A Guide to Alternative Cryptocurrencies

    The corporate’s new fund embraces altcoins with enthusiasm. Lower than half of the fund’s portfolio will include investments in Bitcoin and Ethereum. It is a notable shift from the prevailing funding paradigms in crypto, which usually advocate for a extra conservative, Bitcoin-centric technique.

    As a substitute, the fund goals to leverage HashKey’s wealthy expertise in crypto enterprise investments, diversifying into altcoins that promise higher volatility.

    Learn extra: What Is Altcoin Season? A Comprehensive Guide

    Whereas this technique might elevate eyebrows, it comes when Hong Kong emerges as a prominent hub for crypto innovation. The federal government has been proactive in fostering a crypto-friendly environment. Subsequently selling the event of Web3 expertise.

    Hong Kong has hosted greater than 100 crypto-related conferences this 12 months. And its Securities and Futures Fee (SFC) has just lately updated regulations to permit centralized crypto exchanges to serve retail clients, supplied they maintain an SFC license.

    The Excessive Dangers of Investing in Altcoins

    With over $1 billion in property below administration, HashKey Capital goals to boost an extra $100 million for the brand new fund. It additionally plans to maintain some holdings in money to mitigate the dangers.

    Nonetheless, altcoins are infamous for his or her worth volatility. These property expertise important spikes in bull markets however crash dramatically when market sentiment turns bitter.

    This erratic conduct has contributed to the closure of roughly 13% of crypto hedge funds within the present 12 months, as revealed by Swiss funding consultancy 21e6 Capital AG.

    Within the first six months of 2023, the typical return for crypto funds was 15.2%. In the meantime, Bitcoin recorded 65.2% beneficial properties throughout the identical timeframe. Many of those funds maintained greater money reserves than normal because of the upheaval within the crypto sector in 2022, highlighted by the downfall of FTX.

    Consequently, hedge funds did not capitalize on Bitcoin’s robust efficiency for the reason that starting of the 12 months. In distinction, probably the most important altcoins lagged behind Bitcoin.

    Bitcoin Price Performance YTD
    Bitcoin Value Efficiency YTD. Supply: TradingView

    Whether or not HashKey Capital’s guess on altcoins will repay stays an open query. If the gamble fails, will probably be a cautionary story, underscoring the inherent dangers of chasing excessive returns.


    In adherence to the Belief Venture pointers, BeInCrypto is dedicated to unbiased, clear reporting. This information article goals to offer correct, well timed data. Nevertheless, readers are suggested to confirm info independently and seek the advice of with an expert earlier than making any selections primarily based on this content material.

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