A new cryptocurrency hedge fund called Circuit Capital is launching in January. Based in San Francisco and Singapore, the fund has four founders, including a former Deutsche Bank AG trader and a private equity analyst.
While it’s curious timing to create an investment opportunity based on a cryptocurrency market that’s recently lost 70% of its value, Circuit’s founders disagree.
According to a Bloomberg report, Eugene Ng, ex-Deutsche Bank derivatives trader and Circuit co-founder, says,
“Despite what is happening with prices, we’re seeing adoption growing and a lot of people are looking to scale crypto businesses. We are starting to see talent moving into this space and institutional infrastructure developing.”
To gauge these developments, Circuit is developing an index that measures blockchain technology-backed digital assets. The metrics will follow 10 data points, including
- Transaction volume
- Number of active crypto wallets
- Hash rates
- Web searches for articles on crypto
- Hiring of technology and financial professionals in the industry
Ng will oversee the fund’s Asian business with former Tikehau Capital analyst Aaron Tay. Bo Nam and Richard Jahnke, two former technology stock analysts turned venture capitalists, will manage Circuit’s US operations.
According to Nam, Circuit seeks to raise $30 million by its first-quarter launch with investment capital gradually increasing to over $100 million. While $100 million may seem like a small amount for most macro hedge funds, he says it’s a significant amount for the crypto market.
Andreessen Horowitz launched their $300-million crypto fund a16z earlier this year. Paradigm, a crypto fund recently launched by Coinbase co-founder Fred Ehrsam, former Sequoia Capital partner Matt Huang and Charles Noyes of crypto fund Pantera Capital, just raised $400 million.
Pantera, founded by former Goldman Sachs trader Dan Morehead, is also reportedly on track to raise $100 million of its $175-million target for its third fund, despite the bear market. The fund recently disclosed raising $71.45 million in a new round of funding.