Crypto Fund Says It Has Outperformed Bitcoin for Five Years

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A blockchain-focused fund that says it uses a “traditional Benjamin Graham, Warren Buffet approach to investing in blockchain-based assets” has outperformed Bitcoin with less volatility for five out of five years, according to the press release.

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Off The Chain Capital, a fund with $339 million in assets under management, announced that it has averaged 133% per year since its inception in 2016. GOBankingRates asked for comment, but hasn’t heard back yet.

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“Bitcoin is the 10th best performing asset class over the past 12 years and has the highest Sharpe ratio than any other asset,” said Brian Estes, CEO and CIO of Off the Chain Capital, in the press release. “Our goal is to outperform bitcoin with less volatility, and we have consistently done that.”

Estes said the company has been able to achieve these goals by securing mispriced digital assets and acting as a liquidity provider for employees and startup investors looking to exit their positions in prominent blockchain companies.

The company said the fund has also outperformed the S&P 500 since its inception by 3.653% and is 99.99% uncorrelated with the S&P 500, according to the publication.

According to its website, the fund embraces the value investment philosophies of Graham, Buffett and Charles Munger, and “aims to provide downside protection without sacrificing upward growth.”

The fund can accept qualified buyers and its portfolio allows exposure to blockchain companies and assets such as Digital Currency Group, Polychain GP, ​​Kraken, Mount Gox bankruptcy claims, Binance, Osprey, Core Scientific, Bitpay and mispriced digital assets.

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According to CNBC, the fund aims to buy a dollar worth of blockchain assets for 50 cents and earn a return on purchasing the assets, rather than buying them at a fair market value and letting them rise. In this way, it can apply a value approach while capturing the growth of the still fledgling industry.

For example, two years ago, Off the Chain was a big buyer of shares in Mike Novogratz’ Galaxy Digital, which was then going for about 70 cents, Estes told CNBC.

Silvergate Bank is another company that Estes believes is mispriced. The crypto-friendly bank went public two years ago and was valued as a bank when it operated as a crypto company, CNBC said.

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About the author

Yael Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including: Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also served as vice president/senior content writer for major New York City financial firms, including New York Life and MSCI. Yael is now a freelancer and most recently co-authored the book “Blockchain for Medical Research: Accelerating Trust in Healthcare”, with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in journalism from New York University and one in Russian studies from Université Toulouse-Jean Jaurès, France.

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