Other industry highlights:

• Muti-Strategy Fund Defies Bear Market Odds — Doubles LP Base and Seeks $10M Cap Raise

• $79M Quant Fund Launches Back Office Ops in Singapore

• Crypto Hedge Fund Trailblazer Releases Options Arbitrage Program

____________

^{🗞 Allocator Developments 🗞}

Abu Dhabi’s $27B Crypto Play — The largest publicly traded company in Abu Dhabi, International Holding Company, headed by a prominent member of the emirate's royal family, is establishing a new holding company, 2PointZero, with assets valued at 100B dirhams ($27B). 2PointZero will make investments across various sectors, including crypto and alternatives. The holding company currently has exposure to crypto mining firm Citadel Technologies.

Crypto Native Family Office Launches Prop Trading Arm — Novi Loren, a crypto native family office, is launching a prop trading firm and is actively looking to recruit quantitative analysts, portfolio managers, and financial analysts. The firm is headed by Lily Francus, a former software engineer and quant researcher.

Inception Capital Closes $30M FoF — Inception Capital, a $50 AUM venture capital firm focusing on early-stage web3 investments, previously recognized as OP Crypto, has successfully concluded its first-ever VC FoF raising $30M. The OP Fund of Funds I LP aims to offer diversified exposure to early-stage cryptocurrency venture opportunities.

Former Allocators Launch “First-Ticket” to “First-Time” Fund — Thema, a seasoned team with a track record of deploying over £400 million in cornerstone capital to inaugural and emerging fund managers, is set to become a primary investor for first-time General Partners (GPs). They will invest as a cornerstone Limited Partner (LP), offering tickets of up to £5M and delivering strategic support through their comprehensive regulatory, legal, and operational package, thereby minimizing the expenses associated with fund establishment.

____________

🔥 What’s Hot in Crypto 🔥

Muti-Strategy Fund Defies Bear Market Odds — Doubles LP Base and Seeks $10M Cap Raise

Despite a challenging fundraising environment that led to the closure of approximately 35% of crypto-dedicated hedge funds in 2023 and continues to persist in 2024, Dchained Capital has done the improbable. The multi-strategy hedge fund not only doubled its LP base in 2023, but is in talks with three institutional allocators to raise an additional $10M by the end of Q1 2024.

Co-founded by Edmund McCormack, leveraging his 15 years of Tech executive experience at Apple, MySpace, and Teads and, Jonathan Famery, former professional soccer player turned investment banker, the pair have structured Dchained Capital to maximize risk-adjusted returns via long-term value investments, short-term systematic trading, and active hedging for risk management & volatility harvesting.

Since their launch in 2021, the fund has achieved an annualized return of approximately 65% with a maximum drawdown of approximately 18%. Notably, the fund has experienced no down years, and posted 12 consecutive months of positive performance in 2023. The firm attributes their successful track record to increased utilization of ML and AI-driven insights, which has purportedly enhanced their investment analysis.

Looking forward, Dchained Capital is looking to double down on their "winners" and be opportunistic on high quality projects still trading at a deep discount as new capital is expected to flow into the fund. Moreover, the firm has officially announced its first round of private venture investments (currently valued at cost), scheduled to go to market later this year.

____________

$79M Quant Fund Launches Back Office Ops in Singapore

ECN Research is expanding its global footprint with the opening of a new office in Singapore. Established in 2019, the financial research firm initially focused on forex markets and later diversified into cryptocurrency trading in 2022/2023. Led by Founder Zin Zhang, the 21-person team includes experienced quants from renowned quant trading firms like Optiver and D.E. Shaw, with Zhang bringing prior experience as the founder of Saiw Capital and FICC Research at UBS.

With $79M AUM, ECN Research manages three strategies: stat arb, cross-exchange, and high-frequency trading (HFT). Notably, external investments are limited to the stat arb strategy and cross-exchange strategy.

ECN’s stat arb strategy utilizes machine learning on order book data, employing a random forest model to predict patterns over a 1 to 2-hour timeframe, optimizing for volatility, sentiment, and stop loss. Focusing solely on long positions, the strategy has produced a +29% return in 2022 and a +81% return in 2023, while maintaining a Sharpe ratio above three.

The firm’s cross-exchange strategy, which arbitrages Ethereum and bitcoin perpetuals across exchanges, has yielded an average annualized return of +50% without any monthly drawdowns since going live in 2022.

Expanding beyond its current presence in the US, China, and Canada, ECN Research is opening an office in Singapore this year to expand their back office operations. However, the firm's main priority is to continue to onboard additional exchanges as they look to expand capacity amongst their strategies.

____________

Crypto Hedge Fund Trailblazer Releases Options Arbitrage Program

Victoria Asset Management, one of the oldest digital asset hedge funds founded in 2017, has officially launched their cross-exchange options arbitrage program to begin 2024.

The new strategy employs a systematic approach to trade delta-neutral positions in bitcoin across spot, futures, and options markets. It aims to capitalize on temporary implied volatility inconsistencies observed across various trading platforms.

The strategy’s “edge” comes from the firm's proprietary risk engine. This sophisticated tool generates a matrix of scenarios, evaluating the current portfolio of spot, options, and futures. Additionally, it constructs a hypothetical portfolio optimized for different changes in price, implied volatility, and potential trades, utilizing advanced predictive machine learning algorithms. The strategy is designed to produce uncorrelated low volatility returns, irrespective of the market environment.

Victoria Asset Management is led Brandon Elsasser, CIO and Founder of Victoria Asset Management and Seth Rubin, CEO and former Founder of an Ethereum DeFi protocol. Both have spent over 15 years trading futures and relative value spreads in the proprietary trading space.

____________

🍿 Blockchain Bytes 🍿

• Chinese VC firm GBA Capital announces $10B web3 fund to invest in startups focusing on VR, metaverse and NFTs — Plans to transform the Guangdong-Hong Kong-Macao economic area into the world’s “meta-asset capital” (Cointelegraph)

• Crypto quant firm, Baus Capital, founded by former BlockTower trader, Seattle Smith, secures fund’s first GP investment (SEC)

• Yolo Investments launches second investment fund targeting €100M AUM. Yolo’s first fund, which launched in 2019, had an internal return rate of +40% (Next.io)

• $100M multi-strategy crypto hedge fund, Parataxis Capital, gains +341% in 2023, attributing their outperformance to bets on Solana and bitcoin (Parataxis Capital)

• According to data collected by Galaxy’s VisionTrack, Galaxy estimates nearly 35% (250 out of 715) crypto hedge funds closed from May 2022 through December 2023 (Galaxy Digital)

• Hong Kong based Waveslab Ventures unveils $15M VC fund to invest in crypto infrastructure, real-world assets and scalability solutions (Cointelegraph)

• ego death capital raising $100M for second fund to provide Series A funding for bitcoin companies (ego death capital)

• Paper Ventures, founded by former pro-poker player and bitcoin exchange builder, becomes new VC to enter into the crypto space with $25M fund raise (Games Beat)

• Former Ledger Prime employees launch Split Capital, a long only crypto hedge fund focusing on longer-term / “founder friendly” approach — Will target the middle 80% of the token market (CryptoNews)

_{Disclaimer: The information provided in this newsletter is for general informational purposes only. The information provided in this newsletter is not intended to solicit any type of investment. It is not intended to be a substitute for professional advice, and you should not rely on it as such. Any action you take based on the information presented is at your own risk. We make no representation or warranty, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the newsletter or the information, products, services, or related graphics contained on the newsletter for any purpose. Any reliance you place on such information is therefore strictly at your own risk. In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this newsletter.}