M11 Funds, the asset manager offering regulated alternative investment funds in digital assets, declared at the Digital Assets Conference in London today that the industry is at an inflection point, signaling the present as the time to invest.
The Digital Assets Conference brings together leading firms in traditional finance, such as Goldman Sachs, Nomura, and KKR, and the digital assets sector. On a panel titled “Appetite uncovered: Assessing risk and reward in digital assets”, M11 Funds Managing Director and Partner Martijn van Veen compared today’s digital asset hedge fund landscape to that of traditional hedge funds in the late 1990s and early 2000s.
Van Veen explains: “The digital assets fund industry is at an inflection point. We see investors like BlackRock filing for spot Bitcoin ETFs, offering institutional investors direct ownership, minimal counterparty risk, and increased transparency. Sector innovations like liquid tokens give investors additional flexibility, liquidity, and capital efficiency. Not to mention the current market phase is full of unique alpha capture opportunities.”
“This is a nice parallel to the late 1980s and early 2000s,” he added. At this time, after the dotcom bubble burst, hedge funds gained widespread adoption by institutional investors. “The hedge fund sector shifted from the traditional long/short equity positions to a variety of strategies and a broader range of asset classes, and institutional investors poured in.”
By 2000, many institutional investors had made their first hedge fund allocations. The current digital assets hedge fund sector is building up to a similar increase in adoption and is on its way to achieving mainstream acceptance among investors over the coming years.
In this landscape, Van Veen concludes: “We look forward to leveraging our deep sector knowledge to construct portfolios that outperform benchmarks as we anticipate the beginning of an exciting new market cycle. The time for wealth managers, family offices, private banks, and the likes to begin investing is now.”