(Bloomberg) -- CoinShares, one of Europe’s largest cryptocurrency asset managers, is starting a hedge fund division as it seeks to make inroads with American investors.
The St. Helier, Jersey-based firm on Friday debuted the CoinShares Hedge Fund, which will be available to qualified US investors. CoinShares is known for its offerings of virtual-currency exchange-traded products, overseeing more than $2.5 billion in assets under management overall.
“The market, the macro environment is very fertile for this because of monetary policy, lots of volatility, macro uncertainty,” CoinShares’ Chief Executive Officer Jean-Marie Mognetti said in an interview. “When you get interest rates which are a bit higher, being able to deliver some kind of outperformance is much more interesting.”
The firm’s proprietary trading division, which uses its own capital rather than acting on the behalf of clients, will be integrated into the Hedge Fund Solutions division, he said.
CoinShares had filed plans with the US Securities and Exchange Commission over the summer to launch two new feeder funds, focusing on Bitcoin and Ether respectively. Both filings designated the products as hedge funds that had yet to process their first sales, with CoinShares declining to disclose their respective aggregate net asset value. Mognetti also declined to discuss what types of strategies the new division will deploy.
“We can see now that the stats on-chain and also off-chain are showing that people are starting to hold to their Bitcoin and are not letting them go,” he told Bloomberg TV on Friday. “People are starting to realize and go back to the real principles of Bitcoin, for instance, whether it was a reserve of value, a way of storing of value for them for the long term, and not kind of just like a trading asset.”
The launch is coming at a time of heightened US regulatory scrutiny of cryptocurrencies, where the SEC has targeted exchanges and other digital-assets projects. A number of crypto hedge funds had imploded during 2022’s bear market, having gotten caught up as prices — and many crypto-centric firms — collapsed. A slew of companies have since pulled back from the crypto space — Jane Street Group and Jump Crypto, for example, are scaling back their ambitions, Bloomberg News recently reported.
“We want to be a global leader,” Mognetti said of CoinShares’ expansion into the US. “We tend to be contrarian by nature. When we started doing crypto in 2012, 2013, nobody believed in what we were doing. So when everybody starts to lose faith in US markets, I think it’s probably time to pay attention to the US.”
--With assistance from Ed Ludlow and Caroline Hyde.
(Updates with additional Mognetti comment.)
©2023 Bloomberg L.P.