A cryptocurrency fund that is scheduled for launch early next year believes that the current slump in prices is distracting people from the ever-growing adoption rates of both consumers and investors alike.
Circuit Capital has also created an index to measure mainstream adoption of blockchain-related technologies.
Circuit Capital Index Shows Adoption is Rising, Even if Price Isn’t
According to a report in Bloomberg, the founders of a new San Francisco-based cryptocurrency hedge fund believe that the poor performance of digital asset prices during 2018 has made it more difficult to observe the ever-rising interest in the space from both consumers and investors.
Former Deutsche Bank derivatives and Circuit Capital co-founder, Eugene Ng, told the publication:
“Despite what is happening with prices, we’re seeing adoption growing and a lot of people are looking to scale crypto businesses… We are starting to see talent moving into this space and institutional infrastructure developing.”
Likewise, the coming Bakkt platform from the Intercontinental Exchange (ICE) and the interest multitrillion-dollar asset manager Fidelity Investments has shown in the space also represents an evolution of the underlying digital asset investment infrastructure.
Meanwhile, many individuals are turning their backs on employment in the traditional finance sector in favour of positions at cryptocurrency startups. Recent hires by Coinbase and others are examples of such a migration of talent.
Circuit Capital is hoping to ride the next wave of investor interest. It plans to raise $30 million and launch in January 2019. Bo Nam, a former tech stock analyst and one of the four co-founders of the new fund, said Circuit plans to grow assets to over $100 million.
Completing the team of Circuit Capital co-founders is Aaron Tay, former analyst at Tikehau Capital, and venture capital investor Richard Jahnke.
The plan is for Circuit Capital to operate in both the U.S. and Asia. Tay and Ng will oversee the eastern wing of the hedge fund. Meanwhile, Nam and Jahnke will manage the company’s interests in the United States.
Circuit Capital has also developed an index to track interest in cryptocurrency and blockchain technology. It draws data from a variety of sources. These include: the number of active crypto wallets, transaction volumes, different crypto’s hash rates, hiring rates in the industry, and web searches for content relating to digital assets.
According to the Circuit Capital index there is an increasing adoption of cryptocurrency. However, prices have yet to register this heightened interest.
Presumably, since most institutional investors that have already taken up positions in cryptocurrency have done so in over-the-counter trades, and it was retail investors who drove the late 2017 up movement bearing the brunt of the crash earlier this year, it will take more recovery time before typical exchange demand increases again.
When it does, the infrastructure will be much more prepared for huge surges in demand than it was last time round.
They’ll also be a lot less Bitcoin to buy thanks to these OTC accumulators, and we all know what reduced supply and increased demand means.