Since the value of Bitcoin began to recede in early-2018, investors from across the globe have sought to find a silver lining to latch onto.
However, with initial coin offerings (ICOs) seeing less than adequate amounts of interest, security tokens failing to pick up steam, and corporations remaining hesitant to adopt blockchain-based technologies, investors have only found hope in institutional involvement.
And, with a number of developments and cries for the arrival of the “institutional herd,” it has become apparent that finally, after a multi-month downtrend, crypto investors can find some much-needed solace.
Silver Castle Launches Two Crypto Funds, Looks to Institutional Investors
According to a report from Bloomberg, Silver Castle, a Tel Aviv, Israel-based digital asset investment house, has recently launched two cryptocurrency-centric funds.
Silver Castle’s first fund trades on the back of an undisclosed group of algorithms, which reportedly analyze the momentum of the five most capitalized cryptocurrencies, before opening short or long positions as it sees fit. Eli Mizroch, CEO of Silver Castle, explained that these algorithms have been used in-house for over a year, with results being in the “high double-digits,” presumably in terms of percentile.
The second fund, which also makes use of algorithms, offers investors a collection of this market’s top 10 cryptocurrencies. The latter fund is likely aimed at the long-term crypto investor, while short to medium-term investors would have a penchant for the former.
By year’s end, Silver Castle, Israel’s first institutional-focused cryptocurrency investment corporation, hopes to have $50 million in investor capital under its belt via the two aforementioned funds. Speaking on his firm’s appeal to institutional grade investors, Mizroch stated:
“We spent close to a year building robust infrastructure for managing other people’s money at the level of institutional grade with very, very high security.”
If the two aforementioned funds garner adequate support, Mizroch hinted at his startup’s plans to offer a third fund, which would be focused on investing capital in ICOs and tokens.
Silver Castle evidently wants to maintain its hegemony over the Israeli crypto ecosystem, as a multitude of startups and organizations in the region continue to eye blockchain technologies and cryptocurrencies. Israel-based eToro, for one, recently doubled-down on its crypto-related offerings, launching a cryptocurrency wallet after first offering Bitcoin (BTC) speculative trading in 2014.
Binance CEO: Institutional Involvement Is “Very Net Positive”
Interestingly, Silver Castle’s foray into professionally managed crypto funds comes amid a newfound drive to obtain the business of institutional players in this market. Speaking with The Street’s Jordan French, Changpeng “CZ” Zhao, CEO of Binance, explained that “increased institutional participation is a very good thing.”
Bringing up Boston-based Fidelity Investment’s recent foray into the crypto market, dubbed an “all-in play” by optimists, CZ noted that the establishment of Fidelity Digital Asset Services (FDAS) “suggests the crypto market cap will grow a lot more.”
Essentially using the age-old concept of the “snowball effect” to describe this market’s potential growth cycle, Zhao then explained that as this market swells, so will adoption, subsequently bolstering prices.
The Binance executive then discussed volatility in this market, verifying the popular theory that institutional involvement calms emerging markets, like Bitcoin, while also enticing more players in.
Taking this all into account, in short, as put by Zhao:
“All of this I think is very positive. It’s just a matter of time [that institutions will arrive en-masse]. I don’t know how quickly it will happen, but it will happen.”
Zhao’s aforementioned comments echo a tweet he made in late-October, in which he noted that “sooner or later,” funds from the pockets of institutions will make a perceptible appearance in cryptocurrency markets for the first time ever.
Interestingly, Zhao isn’t the only industry savant to be making such claims, far from it in fact. Mike Novogratz, a former institutional banker-turned-cryptocurrency investment deity, recently lauded FDAS’ proposed custody solution, before subsequently aiming his firm’s scopes at institutional clients.
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