Pantera Bitcoin Fund is one that has delivered unbelievable returns.
The fund is the first in the world that deals only in virtual currencies and there was astonishment when it released its returns via a letter sent to its investors. The rate of return for the fund throughout its life – since 2013 when it was set up, is an unbelievable 25,004 percent.
The fund noted a large portion of that gain taking place this year – driven by the amazing rise in the price of an individual bitcoin. This cryptocurrency touched $19,000 on Monday.
Moreover, the calculations of the returns of the fund was made when the price of bitcoin was $15,000 and hence at the current prices, the returns would have been wider.
When the return is compared to the best performing hedge fund globally last year with only 148 percent, according to Prequin, a hedge fund tracker.
Not much had to be done by the Pantera Bitcoin Fund to obtain those returns. The fund simply kept buying bitcoins as the price of the cryptocurrency went up. The performance of the fund is reflective of the huge gains made by bitcoin this year. Some analysts have even gone on to claim that the performance of bitcoin is even better than the gains that were made by Dutch tulip in prices in the 1600s.
But back in 2013, creating a hedge fund that dealt only in bitcoins was not an easy task because it was then considered to be a mode of payment for online drug market, said Dan Morehead, the founder of the Pantera Bitcoin Fund.
“The first hard part was actually deciding to launch a cryptocurrency fund when everyone else thought that was crazy,” he said on Monday.
However, the complete range of 25004 percent returns have not been able to be enjoyed by many the Pantera fund investors. Some of the investors had invested early in bitcoin trough the fund but sold out when the cryptocurrency saw a slow and steady fall in 2014 and 2015. While others wo had invested during the current boom of bitcoin only got returns which have been made in the last year. but even that is not bad at 1900 per cent.
The fund is also facing competition due to those gains. According to the research firm Autonomous Next, the total number of hedge funds operating in cryptocurrencies is now 175 as over 150 new such funds have been created this year itself.
Returns of $2.1 billion was made for the investors by the fund when its gains are measured in dollar terms. Bitcoins totaling about $1.7 billion in worth have been taken out by investors and have been held by them individually so that they do not have to pay the 0.75 percent annual fees of Pantera. Thus, the fund is left with virtual coins that are worth about $400 million. On the overall, only about $150 million was paid to the fund by investors.
Only accredited investors with significant assets are allowed to invest in Pantera – like in all hedge funds. $50000 is the minimum investment.
The strategy of buying and holding bitcoins, which was followed by Pantera Bitcoin Fund can easily be replicated by smaller funds.
(Source:www.nytimes.com)
The fund is the first in the world that deals only in virtual currencies and there was astonishment when it released its returns via a letter sent to its investors. The rate of return for the fund throughout its life – since 2013 when it was set up, is an unbelievable 25,004 percent.
The fund noted a large portion of that gain taking place this year – driven by the amazing rise in the price of an individual bitcoin. This cryptocurrency touched $19,000 on Monday.
Moreover, the calculations of the returns of the fund was made when the price of bitcoin was $15,000 and hence at the current prices, the returns would have been wider.
When the return is compared to the best performing hedge fund globally last year with only 148 percent, according to Prequin, a hedge fund tracker.
Not much had to be done by the Pantera Bitcoin Fund to obtain those returns. The fund simply kept buying bitcoins as the price of the cryptocurrency went up. The performance of the fund is reflective of the huge gains made by bitcoin this year. Some analysts have even gone on to claim that the performance of bitcoin is even better than the gains that were made by Dutch tulip in prices in the 1600s.
But back in 2013, creating a hedge fund that dealt only in bitcoins was not an easy task because it was then considered to be a mode of payment for online drug market, said Dan Morehead, the founder of the Pantera Bitcoin Fund.
“The first hard part was actually deciding to launch a cryptocurrency fund when everyone else thought that was crazy,” he said on Monday.
However, the complete range of 25004 percent returns have not been able to be enjoyed by many the Pantera fund investors. Some of the investors had invested early in bitcoin trough the fund but sold out when the cryptocurrency saw a slow and steady fall in 2014 and 2015. While others wo had invested during the current boom of bitcoin only got returns which have been made in the last year. but even that is not bad at 1900 per cent.
The fund is also facing competition due to those gains. According to the research firm Autonomous Next, the total number of hedge funds operating in cryptocurrencies is now 175 as over 150 new such funds have been created this year itself.
Returns of $2.1 billion was made for the investors by the fund when its gains are measured in dollar terms. Bitcoins totaling about $1.7 billion in worth have been taken out by investors and have been held by them individually so that they do not have to pay the 0.75 percent annual fees of Pantera. Thus, the fund is left with virtual coins that are worth about $400 million. On the overall, only about $150 million was paid to the fund by investors.
Only accredited investors with significant assets are allowed to invest in Pantera – like in all hedge funds. $50000 is the minimum investment.
The strategy of buying and holding bitcoins, which was followed by Pantera Bitcoin Fund can easily be replicated by smaller funds.
(Source:www.nytimes.com)
