Bitcoin (BTC): Investment funds are flourishing!

Cryptocurrencies are increasingly attracting investors by establishing themselves in the media and financial landscape. The craze for these active ingredients still seems relevant despite thea falling prices since January 2022. The specter of regulation also constitutes a form of barrier to entry for long-term investors. New, the largest fund manager Blackrock has made a partnership with the company Coinbase. The purpose of this investment fund is to offer bitcoin to its customers. This trend is accentuated with the arrival of a new fund: GSR Capital Limited.

What is GSR Capital Limited

On August 3, 2022, the digital asset trading company GSR Capital launched GSR Capital Limited aimed in particular at institutions and family offices. In 2013, former Goldman Sachs officials founded the company. Its purpose is to traditionally associate with cryptocurrency projects. Concretely, the group provides liquidity on the markets, in particular for Binance, Coinbase and FTX. These entities are now leaders among centralized exchanges. The development of the fund was carried out last year by the recruitment of research and exploitation personnel. Two funds have been formed: One is focused on bitcoin exposure, the other on a broader market.

According to GSR CEO Jakob Palmstierna, the company has already seen considerable interest from family offices and institutional investors. The latter wanted to be exposed to digital assets and had probably to generate it and therefore to potential gains. One of the best ways to gain exposure to a new asset class, he says, is through allocation to an investment manager. The new fund comes in response to a lack of options for investors in the crypto ecosystem.

GSR Capital Limited: betting on a risky market

GSR Capital wishes to reassure qualified but cautious traditional investors to invest in this new asset class. Its goal is therefore to bring creation to these assets by highlighting a certain familiarity with traditional finance. Or, the cryptocurrency market has seen a significant price drop amid geopolitical news. This fall is also multifactorial and the collapse of LUNA precipitated the pullback for investors. We can also cite the bankruptcies of certain investment funds that had significant media coverage, such as that of Three Arrows Capital. Still, the CEO remains confident because of the inherent opportunities in blockchain technology, the deep pool of talent in the industry, and the $36 billion in venture capital invested last year. According to him, the combination of these three elements constitutes an important index of growth in the future.

The challenge: Reassuring investors about bitcoin (BTC)

Although digital assets can be esoteric, the company wants to be a long-term player in the crypto ecosystem and create an experience that feels familiar to more traditional investors. The goal is to make the experience transparent and comfortable for investors and especially for institutions. They have to face many challenges, particularly in terms of investment analysis, governance and due diligence.
The rapprochement between DeFI and traditional finance is accelerating but does not erase the systemic differences between these assets. As the business grows two more funds are expected to launch alongside GSRT in 2022.

The conclusion is therefore as follows: Investors are desperately looking for new sources of significant returns. The new fund aims to meet this need and attract investors in a cautious market. Despite the current bear market, this trend is becoming increasingly clear. Some are particularly exposed to this market today. This is the case for example of the Ark invest fund in which Cathie Wood takes a pro tech position.

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Avatar Sami AYADI

Sami AYADI

To the angelism of the intercessors of the current monetary system, I oppose DeFi, digital assets and the metaverse. Lawyer in Luxembourg, I am interested in cryptocurrency investment funds.

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