(BOSTON, MA) - With Bitcoin rocketing to all time highs, cryptocurrency hedge funds saw record setting 2020 performance with several funds returning more than 5x to their investors, according to CryptoFund Performance. Leading the pack for 4th quarter was the Crypto & Income Strategy (AX Momentum, LP) from Sarson Funds, which took home the award for top performing crypto hedge fund across all strategies for the quarter.
Rounding out the #2 and #3 spots for overall net performance were Lavaliere Capital LP from Lavalier Capital and Off the Chain Capital LP from Off the Chain Capital, respectively.
While most crypto hedge funds underperformed against Bitcoin for 2020, a few breakout managers took advantage of the volatile landscape by going long on decentralized finance (DeFi) or deploying strategies that took advantage of the space’s volatility. Sarson Funds did both and the bet paid off for investors in their Crypto & Income Strategy, which took home top performance honors for Q4.
Recent performance did not disappoint, as the Crypto & Income Strategy investors saw net gains over 364% for 2020 according to the most recently published strategy fact card from Sarson Funds.
The Crypto & Income Fund is the first fund in the cryptocurrency space to turn one of the biggest complaints about investing in cryptocurrency – volatility – into a useful feature: current income. The strategy does this through a covered call writing program on some of the largest cryptocurrencies trading on established US-based exchanges as well as staking and masternodes.
The Crypto & Income Strategy is one of several distinct crypto investment strategies on the Sarson Funds platform, which also includes a rules-based Large Coin Strategy, an actively-managed Small Coin (alt coin) Strategy, as well as two new index products: The SmartCrypto Equal Weight 15 Index and the Regulated Stablecoin Index.
As financial advisors look to fill the void for client yield, the Crypto & Income Strategy has seen a surging amount of interest from investment managers. Allowing investors to take advantage of the high implied volatility of cryptocurrencies to generate monthly income while maintaining their long exposure has been a major factor in the strategy's appeal. Increased investor protections have also been a contributing factor to growth.
The increase in regulatory clarity in 2020 combined with growing institutional adoption has seen a heightened drive for crypto investment strategies beyond the traditional HODL (hold on for dear life) mentality.
From the OCC announcement clarifying that banks can custody cryptocurrency and stablecoins, to major companies like Tesla, BNY Mellon and MasterCard embracing the alternative asset class, regulators warming to cryptocurrencies have ushered in a new wave of investors taking a fresh look at crypto.
“It’s not only that there have been calls for clarity for some time and that a new administration brings the chance to take a fresh look, but it also is a moment where it seems others in the marketplace are also taking a fresh look,” said SEC Commissioner Hester Peirce in a recent Reuters interview.
Dubbed by crypto enthusiasts as the “Crypto Mom” due to her supportive stance on the asset class, Peirce has long advocated for regulators to create clear rules that would allow crypto assets to thrive.
"As these regulations unfold and market interest swells, investor education will drive interest to the expanding blockchain-powered ecosystem," said Sarson Funds CEO John Sarson.
“Part of our responsibility is to provide investors with both unbiased education and diverse transparent strategies to compliment the developing cryptocurrency regulatory and market landscape. With this comes new opportunities, and we expect other top performing crypto fund managers to look at expanding digital asset investment options as the asset class continues to mature," Sarson said.
For more information on cryptocurrency investor education, please visit www.sarsonfunds.com.
Sarson Funds is an independent provider of blockchain technology and cryptocurrency marketing and educational services. The firm serves the Financial Professional community and their clients by providing cryptocurrency and blockchain technology educational services and investment solutions. Sarson Funds maintains a Fiduciary Standard at all times, bringing Wall Street standards for research, risk management and transparency to digital asset investing. Along with our Investment Manager and Financial Advisor partners, we believe that disruptive innovation requires a disciplined approach to risk management and education.
For more information, please visit us online at www.sarsonfunds.com.