Launching a Crypto Hedge Fund
By: Genson C. Glier
Tags: Blockchain

Trading, holding, and mining. These are just some of the many ways you can use to profit from cryptocurrencies. But do you know the other ways? It’s definitely possible to have your own cryptocurrency fund.

On this article, you’ll learn how to create and promote a crypto fund with the help of a management platform.

What’s a Crypto Fund?

When you decide to get into the cryptocurrency world, it’s important that you have enough crypto assets with you. People who mine cryptocurrency have a lot. However, for people who are new to this technology, mining a good amount of cryptocurrency can be a challenge because of the increasing complexities involved in the mining algorithms.

The crypto fund refers to the managed capital of the digital money available for the investors to replicate. It works like a bridge between the trader who creates the fund and the other party who’s going to invest in the fund. The main goal of creating a crypto fund is to earn crypto assets, which both parties can benefit.

Since cryptocurrencies want to substitute the fiat currency, the crypto funds have become a digitalized version of the fiat currency. Since crypto is decentralized, anyone can start a fund by simply introducing a new cryptocurrency. Therefore, several types of crypto funds come up with strategies with the sole intention of satiating the appetite of both the traders and the investors and to help them grow their digital assets.

Cryptocurrency Hedge Fund

Cryptocurrency hedge funds are initial forms of cryptocurrency funds that have become popular among the masses because of the convenience that they offer. Just like with other hedge funds, a crypto hedge fund provides minimum risks with remarkable profitability. The investors simply need to pay a small fee if they want to take part in the fund. Nowadays, there are several hedge funds which give the investor the opportunity to capitalize on his money and earn huge profits from it.

Among these are:

Logos Fund

MetaStable

Polychain

Cryptocurrency Mutual Fund

From the name itself, a cryptocurrency mutual fund refers to those types of funds that are created as a result of the investments made by multiple investors who have pooled their capital in crypto to purchase and hold the fund. In exchange, they will be given fund shares. These funds will serve as a great option for startup traders who want to increase their digital assets.

Some of the popular mutual funds are:

Prism

The ICONOMI Fund

The Token Fund

Cryptocurrency Index Fund

The increasing popularity of cryptocurrencies has encouraged investors to start trading in this currency in the same way that they do with the fiat currency. Thus, the crypto index funds have emerged as a means for the newcomers to get into the crypto stock market.

Here are some of the growing cryptocurrency index funds:

Bit20

CRYPTO20

HOLD 10

Cryptocurrency Investment Fund

The Cryptocurrency investment funds work like an all-inclusive platform for investors allowing them to capitalize their money together. These funds allow you to monetize your assets to avail of the market advantages or to provide support for the mining machinery. The funds often come with higher risk. Nevertheless, they yield higher profit margins.

Some of the most notable Cryptocurrency investment funds include the following:

BK Capital Management

Grayscale’s Bitcoin Investment Trust

Pantera Capital

Why Should You Invest in a Crypto Fund?

Even though cryptocurrencies are slowly gaining a lot of attention, many are skeptical about the strength and the authenticity of this digital currency. A lot of investors are still afraid of investing in a cryptocurrency fund. One of the most common issues that people present is the fact that the currency is still in the infancy stage. People are not confident about investing their capital given the risky deals.

But there are certain benefits that you could enjoy if you give the Crypto fund a shot:

The biggest benefit of investing in a Crypto fund is that the Cryptocurrency is set to become the currency of the future. Thus, investing in these funds means you’ll be able to secure your future.

The Crypto funds come with higher profit margins although this also comes with higher risks. Yet, this is how you would be able to earn good money.

The process of Cryptocurrency mining is now becoming more complicated unlike in the past. As a result, the rate of crypto mining is also lowered because of the significant turnover that people have towards Cryptocurrency, as well as the extremely complicated mining algorithms. Therefore, investing in these funds is now much safer.

Why Create Your Own Crypto Fund?

If you’re now convinced that you should participate in the Cryptocurrency funds, the next thing that you probably want to know is how to create a separate crypto fund. Those who have created their funds would agree that starting your own Crypto fund would surely come with several benefits.

It’s a convenient means of earning Cryptocurrency without getting trapped in a complex mining algorithm.

It’s a safe way for newcomers to earn Cryptocurrency and get into the Cryptocurrency world.

It only requires a minimal amount of time to build your Crypto assets using your own Crypto funds unlike with other methods.

How to Build a Crypto Fund

Coming up with your own Crypto fund will not require a lot of effort from your part. You just need to make sure that you’re in the right platform where you can look for appropriate investors to start your fund. Here are the requirements for coming up with a Crypto fund:

A platform that’s in accordance to the type of fund you wish to create, whether it’s an index fund, hedge fund, or mutual fund.

A strategy that will allow you to share your profits with investors.

Your crypto wallet credentials.

What Are the Potential Profits

It’s hard to predict the profit margin of Cryptocurrency funds specifically. The reason is that cryptocurrencies are volatile and usually comes with a 20%± change in the cost in a given day. Therefore, when devising an initial investment plan, these fluctuations must be kept into consideration.

The good side of the Crypto fund lies mainly in the same fact. Cryptocurrencies’ volatility can lead to the generation of bigger profit margins, but the only trick is to keep a close eye on the currency rates. If the rates are low, you should take this as an opportunity to grab your share. On the other hand, once the price starts to increase again, then you should immediately sell your assets. That way, you’ll be able to enjoy greater profits.

For example, you have bought 300,000 Stratis in the previous rate at a rate of $0.01 per share. Thus, your $3,000 initial investment should now earn you around $1 million, since the current rates have increased to $3.5. This is basically how investing at the right time can make people become a millionaire in only a short amount of time.

Crypto Fund Creation

One of the most common problems that beginners are faced with when getting into the Cryptocurrency venture lies mainly on the initial investment. Most of the time, they will look for someone who can lend them the money, so they can proceed. To fill this need, several venture capitalists and investors have come up with the willingness to invest their cryptocurrency assets with you. However, it’s still a challenge for most beginners to look for these types of investors. To address this problem, several dedicated platforms have been created recently to allow fund managers to meet with investors. The platforms will provide an opportunity for newcomers to create crypto funds for them.

Here are the steps you should take:

Come up with a strategy on how you’re going to make a call for these funds. Others would opt to run “donations” on their ICO campaign, while some would choose for a crypto venture that’s investment-based.

Next, figure out an appropriate value of investment for your fund.

Now it’s time to make your plans come true. So start approaching investors to create your crypto fund.

Be open to sharing the tokens with your investors in exchange for the Cryptocurrency that they are investing in your campaigns.

Crypto funds are a safe avenue for those who find it a challenge to get into the complex process of mining as what most venture capitalists would recommend. This is especially applicable for beginners who know nothing about the complex algorithms.

Planning Your Crypto Fund

The thriving cost of Cryptocurrency has gained the attention of numerous capitalists around the world who are looking to invest their assets with data miners. Creating an ideal strategy for fund management to rapidly increase Blockchain assets is truly a wise idea especially if you don’t have enough significant assets with you.

When coming up with a plan for your crypto fund, you should put your focus on some of the most basic questions that could pop in the mind of your investors whenever they hear the term “fundraiser” call. Among these questions are:

What would I gain after investing in your fund?

Why should I be interested in investing with you?

How long will this venture go on?

You must have the answers ready to these questions.

Keep in mind that the main goal of creating crypto funds is to add your digital currency. Furthermore, the investors who have agreed to help you in the process will also anticipate getting their own rewards at the end of the campaign.

Creating Your Fund

Below is a quick guide on how you can create your crypto fund management.

The Initial Coin Offering (ICO)

Setting up a crypto fund is pretty much the same with offering profit share to investors in your company. Your IPO transaction will serve as the basis for attracting investors to your company. Therefore, you must begin by preparing a white paper agreement that would discuss your project concept, project duration, as well as the distribution of virtual tokens in between you and the investors. Above all, it should disclose the overall goal of your campaign.

Search for Investors

Next, you have to look for suitable investors who would be willing to lend their Blockchain assets. An effective way to look for an appropriate investor for your Crypto fund is to utilize online platforms.

Share Tokens

Right after you run your campaign, you can start sharing your tokens with your investors. This is the main thing that your investors would be interested in from the time you launch your ICO.

Top 3 Platforms for Crypto Fund Management

With the increasing number of platforms for online crypto asset management, certain hindrances associated with the conventional method of managing crypto fund are being taken away from the methods of crypto exchange. These fund management websites offer a combined platform for both the crypto managers and investors. Among the most popular platforms are:

Tokenbox.io — This is the number one solution for all matters relating to Cryptocurrency fund. It provides a platform to fund both managers and investors, and they can also take care of all the legal matters concerning the tokenization.

— This is the number one solution for all matters relating to Cryptocurrency fund. It provides a platform to fund both managers and investors, and they can also take care of all the legal matters concerning the tokenization. ICONOMI — This platform was established mainly for digital asset management and is based on the Ethereum smart contracts. It serves as the podium for DAA managers as well as the investors that can help to strengthen the economy of cryptocurrency.

— This platform was established mainly for digital asset management and is based on the Ethereum smart contracts. It serves as the podium for DAA managers as well as the investors that can help to strengthen the economy of cryptocurrency. Melonport — This platform claims to work as a system of tools that aims to empower the investors and traders in setting up their own plans for crypto funds. Working within a pre-defined set of rules, this system provides decentralized services that are convenient for all parties involved in the ICO.

Promoting Your Fund

As soon as you start creating a Crypto fund, determine how you can go about gaining the attention of more investors? Effective marketing and promotional campaign are highly essential for the overall success of any business. This principle should also apply when it comes to creating Crypto funds.

Effective Way to Promote Crypto Funds

Marketing a Crypto fund is somewhat different from the traditional marketing techniques. Smart promotion is important in the overall success of your Crypto fund. You should aim to target your potential investors and fund traders who would be willing to join you. However, targeting a broader audience may not be a good idea. It’s not advisable to apply the spamming technique because your project is definitely not spam.