An Australian digital asset fund launched in December has attracted dozens of wholesale investors since its inception nine months ago, as more people realize the potential for global change in crypto assets.
The DNA tracking fund is a feeder fund of Token Capital Management’s Digital Asset Fund, a global crypto fund audited by KPMG and regulated in the Cayman Islands.
It provides qualified investors with exposure to crypto assets with a minimum investment of AU $ 10,000, said its founder and Sydney-based director Steve Bellotti, former director of ANZ and Merrill Lynch who is also non-executive chairman of fintech. dough (ASX: DOU).
The fund grew 184%, after fees, through the end of August, thanks to unleveraged investments in a selection of the top 20 crypto assets.
“Just to give you an example, these are rough numbers, but I think Bitcoin this year is maybe up 50 to 60 percent, I think the token capital fund has grown to something like just 140, 150 percent this year, “Bellotti told Stockhead.
“So he uses those first 20 to mix into a base bitcoin holding and Ethereum generating, you know, a serious smart beta, that’s how I would put itâ¦.
âI think what’s going on here is that slowly and surely there is institutionalization or financialization and Wall Street dealing with crypto and digital assets,â Bellotti added.
âAnd that’s going to see always competitive money coming in for a finite, finite resource. Because there are a lot of tokens, but there aren’t a lot of good ones at this point.
Bellotti said that in addition to its major holdings in BTC and Eth, TCM uses an algorithm to choose five tokens from the top 20 to invest in, based on their momentum or z-scores.
But the selection is not just based on computers – the investment committee ruled out the holding of confidentiality pieces like Zcash, potential titles like XRP and “joke pieces” like Dogecoin.
âThey’re actually trying to be pretty serious about the investment thesis,â Bellotti said.
The fund has invested in tokens like the high-speed ultrafast blockchain Solana, data feed network Chain link and loan and borrowing protocol Aave, he said.
Bullish on DeFi
Like a number of observers, Bellotti said he was bullish on decentralized finance, or DeFi, the idea of ââreducing financial institutions to lines of self-executing computer code.
âWe are constructive on the global crypto space, but we are very constructive on the DeFi space,â Bellotti said.
DeFi likely has a market cap of maybe $ 160 billion to $ 180 billion, while crypto as a whole has a market cap of $ 2.2 trillion, Bellotti said yesterday.
âOur point of view is that this will grow, the whole space (DeFi) will grow, to become 25, 30, 40 percent of the overall market cap,â Bellotti said.
DeFi’s computer code, smart contracts and crypto verification can replace the current system of “blind trust in counterparties,” Bellotti said.
âYou can recreate everything we’ve done on a central financial basis. It is a very large space which is widely open to disruption, as it means eliminating the middlemen, which are the banks, the broker, etc.
That said, Bellotti says he considers Bitcoin to be “the most pristine asset or collateral in the world today” because it is immutable, easily transportable, incorruptible and very bankable.
Listing of Australian Money Markets
There have been around 40 to 50 Australian investors in the fund, Bellotti said, including self-directed super funds, high net worth and very high net worth investors.
“Of course people are not just looking for alpha, but looking for a way to improve this kind of fixed income and cash portfolio, it has low nominal real returns due to inflation,” Bellotti said.
It is aimed at wholesale investors – institutions would invest directly with TCM’s main fund, he said. (Having a feeder fund gives Australians a convenient option to invest in the local currency, Bellotti explained.)
The Digital Native Asset fund was recently listed on Australian money markets, the Queensland platform with $ 11 billion in funds under management, and DNA is in talks with other brokers in Australia to offer brokers access to crypto assets.
âThere is no reliable way to do this in the country, so they will put this fund on their platform or their clients, directly or indirectly through Australian Money,â Bellotti said.
TCM keeps the crypto on Coinbase, the main US exchange managed by a company listed on NASDAQ, with audit by KPGM and cash management by the Mainstream Group fund administrator (ASX: MAI).
Bellotti said that there is only a small minority of people today who have a âcrypto sleeveâ in their wallet, but that makes sense.
âWhat I think about all the time, okay, we’re very constructive. But if we’re wrong then, people who invest two, three, four, five percent of their entire portfolio, they’re not going to notice if it goes away and it’s wasted.
âBut if we’re right, then that five percent could dramatically improve the alpha created on the restâ¦ I mean, (the returns) that five percent could actually rival the 95 percent you have in assets. traditional. “