Market-neutral crypto funds are emerging. How can a $100 million scale maintain stable profits during the cycle?

Question

【Blockchain Rhythms】Some investment institutions have recently launched a second crypto fund with a scale of $100 million, focusing on market-neutral strategies. In simple terms, it doesn’t bet on market ups and downs but uses algorithmic trading to earn stable excess returns.

This approach is quite interesting. The core idea is to maintain market-neutral positions and avoid one-sided bets. But to truly make money, they focus on two key points: one is to heavily allocate Bitcoin during cyclical lows, and the other is to quickly trade altcoins during strong momentum markets. This way, they can seize cyclical opportunities without overexposing themselves to risk—crucially, maintaining a high Sharpe ratio during drawdowns.

Why launch a second fund now? Because the first fund’s performance has been solid. Since its inception in April 2024, it has returned over 52%, with a total gain of nearly 170%. Currently, this fund manages around $30 million and continues to grow. This indicates that the market recognizes this market-neutral crypto strategy quite well.

In the current environment of frequent crypto market fluctuations and clear cycles, such risk-adjusted stable return strategies truly address the pain points of institutional investors.

MeaninglessApe · Accepted Answer

Basically, it's about playing both sides—buying BTC at lows and selling altcoins at highs. It sounds simple, but few can actually execute it...

HallucinationGrower · Answer

It sounds good to say it's market-neutral, but in reality, it's still betting on the cycle's low point. Isn't that just another way of saying timing?

WalletInspector · Answer

Basically, it's just gambling on cycles, but it's wrapped up in a more "neutral" way haha

AirdropCollector · Answer

A nice way to put it is a neutral strategy, but in reality, it's still a gamble on the cycle—going all-in on BTC at lows, and harvesting altcoin momentum at highs. Isn't that just betting on the market? Even with a high Sharpe ratio, market cooperation is still necessary.

DegenWhisperer · Answer

Basically, it's still about timing the market. Market neutrality? In the end, it's about accumulating Bitcoin at lows and dumping altcoins at highs. What's the essential difference between this and ordinary people buying the dip and selling the top... It's just adding the label of "algorithm."

Market-neutral crypto funds are emerging. How can a $100 million scale maintain stable profits during the cycle?

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