Mike Novogratz: All the Big Macro Funds Should Hold at Least Small Percentage in Bitcoin

CoinSpeaker

Mike Novogratz: All the Big Macro Funds Should Hold at Least Small Percentage in Bitcoin

Mike Novogratz, the chief executive of the TSX-listed Galaxy Digital, made a surprising remark that came straight out of left field saying that he doesn’t understand why large macro funds don’t have a 1% position in Bitcoin (BTC).

Mike Novogratz: All the Big Macro Funds Should Hold at Least Small Percentage in Bitcoin

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Source: CoinSpeaker

Depressed Crypto Markets Make Great Buying Opportunities for VCs

When the first two crypto hedge funds came on the scene in December 2017 the entire market and industry was in a completely different place. Bitcoin was trading in five figures and on a seemingly unstoppable upward surge so shorting it, as these funds allowed for the first time ever, was the better bet.
Hedge Turns Venture for Long Term Investments
Just over a year later the scene is completely different and crypto markets appear to be a desolate wasteland with Bitcoin eyeing further losses below $3,000. Shorting long term is less than appealing so the only place to go for venture capitalists is long on Bitcoin and crypto. Hedge funds investing in crypto now are starting to look more like VCs as the ICO market dissolves into a different form of investment.
According to Bloomberg there are several VCs that are looking at the long game, Polychain Capital being one that has just raised $175 million for a seven year fund. Arca Funds is another that is considering buying up distressed crypto projects as partner and portfolio manager, Jeff Dorman, explained;
“There’s going to be a lot of opportunity in distressed buying and even activist investing. Often you can buy below even the cash value of the company.”
According to Crypto Fund Research around 125 venture funds that provide capital in exchange for an ownership stake were launched in 2018, compared with 115 hedge funds acting as investors. Many of these hedge turned venture funds are focused on acquiring heavily discounted Simple Agreements for Future Tokens (SAFTs) from projects that plan to issue tokens on startup. Pantera Capital Management expects to see more companies raising capital this way, as its own fund invests in tokens ahead of ICOs.
Eurekahedge Crypto-Currency Hedge Fund Index reports that 70% of crypto hedge funds lost out last year while 42 closed up. 2019 will be the year where only the strongest survive but unlike 2018, buying opportunities will be plentiful. Managing partner at Texas based Multicoin Capital Management, Kyle Samani, said;
“We are talking to a lot of institutional investors. A lot of smart people who’ve been interested in crypto for a year, two years, and were waiting for it to cool down, are now looking at the space activity.”
Many of the new funds have longer lock-up periods so investors will be looking at a long term gain rather than quick returns from ICOs. With any nascent technology overnight gains can be a good thing initially but the long term is where the real returns will be and crypto has a long way to go yet.
Image from Shutterstock
 
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Tron Expands Its Partner Network Listing Oracle, Aurora, Steemit and Others

CoinSpeaker

Tron Expands Its Partner Network Listing Oracle, Aurora, Steemit and Others

It seems that last year’s rumors were true and that ORACLE, a cooperation offering a comprehensive and fully integrated stack of cloud applications and platform services, has partnered with Tron (TRX) Foundation.

Tron Expands Its Partner Network Listing Oracle, Aurora, Steemit and Others

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Source: CoinSpeaker

Crypto ICO Price Continues to Fall, Likely Due to Growing Regulatory Pressure

Blockchain and crypto projects that raised millions of dollars via tokenized crowdfunding means are now lining up to return their capital to their original investors. Because apparently, they were not allowed to raise funds in the first place.
The Securities and Exchange Commission (SEC) has gone after these startups for reportedly violating existing securities laws. The US regulator found irregularities in the way companies raised funds, mainly by approaching average Joes instead of sophisticated, accredited investors to raise capital. As a result, the commission issued heavy penalties against the accused blockchain projects, which include the order of returning funds to the investors.

Read this and think through the implications. We called this publicly as soon as the Airfox and Paragon enforcement actions were announced. There are many more shoes to drop for this narrative. https://t.co/3cHtpmr0Ka
— Travis Kling (@Travis_Kling) December 13, 2018

Even Big Crypto Projects Struggling
It could be one of the reasons why even the most genuine startups could see massive declines in their token values. The funds that backed these unregistered assets may no longer be there to return them. Even the hedge fund managers that incorporated them into their crypto portfolios at the first place are now doubtful of their future.
Dan Morehead and Joey Krug, co-chief investment officers of Pantera Capital Management, revealed in their newsletter that their fund invested in 25% of the blockchain projects that violated the US securities law, adding that they may have to refund their backers.
“If any of these projects are deemed to be securities, the SEC’s position could adversely affect them,” they wrote. “Of these projects, about a third (approximately 10 percent of the portfolio) is live and functional and, while they could technically continue without further development, ending development would hinder their progress.”
The funds could also end up paying the bills for offering unregistered securities in their portfolio. In such a scenario, Pantera, which posted gains of 60% amid a crypto crash, therefore may need to shell out a considerable portion of their accumulation as a refund.
An instance that guides to such a scenario is CoinAlpha Advisors LLC. The fund manager last week was slapped with a $50,000 fine by the SEC after the regulator caught it selling unregistered securities.
Regulatory Backlog
The situation related to the future of the US ICO industry is likely to get worse. It would be difficult to predict the coins that have made into the SEC’s hitlist, but the growing scrutiny would deter new startups to launch businesses in the grey area of cryptos. That said, the market could be eyeing further losses as the new year approached, indicating a head down towards the best-possible bottom.
Nevertheless, a clear washout of unregistered ICOs would eventually make space for a new wave of startups. With accredited investors taking them for a ride, there would be fewer cases of frauds that otherwise had hampered the growth of the ICO sector, anyway. A crash followed by a stable uptrend is the best outcome of all this.
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