Tetras Capital, the New-York established digital money hedge fund using a “short Ethereum” thesis, will be closing down and returning residual assets under management for investors. The finance started in 2017 together with the intention to exchange altcoins, but became notorious for shorting Ethereum if ETH’s typical price was $700.
Based on reports, Tetras Capital is down 75% since it established in 2017. However, it would be simple for hedge funds to prevent substantial losses when they stuck into Bitcoin and didn’t gamble their money from low-cap altcoins or hobby programs such as Ethereum.
Why electronic hedge funds should think about Bitcoin
Bitcoin (BSV) is among the greatest performing digital resources since its beginning. At press time, BSV is upward 128% by the day it was produced on November 15, 2018.
Unlike non market cap altcoins without a long term, blockchain protocols which are continuously changing because of protocol updates, or blockchains which are restricted by artificial technical parameters like restricted block size limitation or very low throughput, Bitcoin is the sole blockchain protocol that’s unbounded, secure, and at which value-production is basic rather than speculative.
Bitcoin is the only scalable blockchain protocol, including BTC and ETH, there’s absolutely no block size limitation on BSV. Additionally, the Bitcoin system is capable of managing thousands of transactions per minute, in contrast to networks such as BTC and ETH which are limited to just 7 and 15 trades per second . Eric Bernhard in The Bayesian Group, a Toronto based FinTech firm that conducts the world’s earliest AI-Quant Crypto Hedge Fund clarifies:
“Outside of BSV, we don’t see many exciting opportunities. Let’s take ETH as an example—ETH doesn’t currently have a hard cap on total supply, which reduces our excitement from an investment perspective. When combined with the clear scalability problems that ETH is experiencing, it’s easy to see why we’re bearish on ETH’s outlook.”
The technical liberty on Bitcoin along with the protocol being put in stone provides both businesses and investors confidence in the Bitcoin protocol. It helps companies to build atop Bitcoin, without worrying about routine upgrades that could create their prior workforce —a issue with Ethereum. And the characteristics of Bitcoin provide investors confidence that value is basically being inserted into the Bitcoin protocol, which their capital won’t wind up like Tetras Capital’s.
Will more money shut?
The Tetras Capital closed down comes soon after the very first digital money hedge fund at the UK., Prime Factor Capital, shut its doors, citing inadequate need as the most important reason.
Info from Crypto Fund Research also demonstrates that fewer electronic money hedge funds are starting every year. In 2019, just 45 digital money funds started, when compared with this 284 digital money funds that started in 2018.
Together with the future of each blockchain network which isn’t Bitcoin looking gloomy, you can expect to see even fewer electronic money hedge funds launching this season in comparison to previous year, and more digital money market funds closed down.
Brand New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners segment, the best resource guide to find out more about Bitcoin—as initially envisioned by Satoshi Nakamoto—and blockchain.