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  • Bitfinex’s $280 million hedge fund – Fulgur Alpha – can now be accessed by accredited investors.
  • It isn’t available to the residents of the US, Bahamas and restricted jurisdictions like Iran and North Korea.

Bitfinex, a crypto exchange, has recently listed its first crypto hedge fund. The firm noted that institutional investors can now access the $280 million hedge fund – Fulgur Alpha. Paolo Ardoino, CTO of Bitfinex, told The Block:

The minimum investment size of the fund is $10 million for accredited investors.

Bitfinex said that Fulgur Alpha is a Bahamas-based absolute returns crypto hedge fund. Generally, absolute return funds are designed to offer a stable return regardless of the market conditions and are mostly opted by conservative investors. Fulgur Alpha’s assets are held in Delchain Limited and it is managed by Deltec Fund Services, a Bahamas-based fund administrator and division of Deltec International Group.

Ardoino added:

This framework replicates a model familiar to traditional hedge funds: A safe trading venue (Bitfinex), a crypto custody solution (Delchain), and a fund manager (Deltec Fund Services).

Bitfinex is providing trading infrastructure for the fund. 

While Bitfinex currently has numerous large accounts, varying from professional traders to crypto hedge funds, this is the first time a fund of these dimensions has onboarded through an ad-hoc framework.

The executive head of operations at Delchain, Bruno Macchialli, said that the fund is a “unique proposition” and represents “a blueprint for institutional investment in crypto, leveraging the required liquidity and custody solutions.”

Ardoino further noted that the fund is not presently available to the residents of the US, Bahamas and other restricted jurisdictions such as Iran and North Korea. Bitfinex is looking forward to more funds adopting the Fulgur Alpha’s framework. 

We believe this is going to be a growing trend for 2020-2021, since it guarantees more protection for investors and it has more controls in place.

We are seeing big requests in crypto-custody integrations for 2020, and this means that such custody providers are going to service a growing number of funds (either fully crypto-oriented or just dedicating a part of their assets under management to crypto) that want to trade on a professional trading venue but at the same time want to ensure that they have all the protection they are used to in a traditional fund set up.