Asset manager CoinShares to launch hedge fund in US despite intense regulatory scrutiny

• CoinShares will be starting the hedge fund as an attempt to make inroads with American investors.
• The asset manager’s CEO announced the macro market is very fertile owing to the monetary policies and volatility.
• CoinShares is starting the fund at a time when it has been losing its investors’ funds to outflows for eight weeks now.

Amidst the regulatory uncertainty in the United States, the crypto space is still finding takers, and adoption continues to grow. The newest name on the list is the billion-dollar asset manager CoinShares, which is taking a different step in the country.

CoinShares to launch a hedge fund

With over $2.5 billion worth of assets under management, CoinShares is among the biggest asset managers in Europe. The firm is now making a move in the United States to onboard American investors with a new hedge fund division.

Launching the CoinShares Hedge Fund, the asset manager states that it would be offering its services to qualified US customers soon. This will be facilitated through CoinShares’ trading division. This division would be integrated into the Hedge Fund Solutions division, according to the Chief Executive Officer Jean-Marie Mognetti.

The CEO, talking about the new hedge fund in the US, stated,

“The market, the macro environment is very fertile for this because of monetary policy, lots of volatility, macro uncertainty. When you get interest rates which are a bit higher, being able to deliver some kind of outperformance is much more interesting.

The launch of the hedge fund comes weeks after the asset management firm filed to launch two feeder funds, which would focus on Bitcoin and Ethereum, respectively. 

Interestingly, Mognetti clarified that the hedge fund is not an attempt by CoinShares to capitalize on the return. She iterated,

“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 comes at a time when regulatory scrutiny is at its peak; however, the recent surge of support for crypto markets and the increase in anti-SEC groups is a boon to the hedge fund.

Investors continue to lose interest.

According to the CoinShares weekly, institutional investors seem to be losing confidence in the market. For the past eight out of nine weeks, the market has only seen outflows at the hands of institutions. 

Even the most recent report highlighted that as per data obtained up to September 15, investors’ skepticism is taking over the markets, with many still fearing a drawdown. To offset their losses, these investors are bound to sell, resulting in outflows amounting to $54 million.

Institutional investors’ outflows

This is a matter of concern as the development of a US hedge fund would need the support of United States investors, too. This is a little difficult since the country is now very lucrative to return, as stated above. If the hedge fund manages to bring in investors, it would be a testament to how the positive sentiment of investors trumps the bearishness.