Strong Increase in Allocations to digital assets from professional investors: Nickel

CIO Review Europe | Monday, February 08, 2021

As per Europe's largest regulated digital assets hedge fund manager, institutional investors and wealth managers have drastically expanded their allocation to cryptocurrencies and digital assets

FREMONT CA: Nickel Digital Asset Management (Nickel), a London-based crypto hedge fund, has revealed that institutional investors and wealth managers have dramatically amplified their provision to cryptocurrencies and digital assets over the past years. Based on a survey of professional investors from the US, UK, Germany, France, and the UAE, who collectively have around $108.4 billion in assets under management, 94 percent increased their portion to crypto and digital assets over the past year.

Stating further, Nickel said that most professional investors have minute levels of disclosure to crypto and digital assets as they are 'testing' the market in terms of working atmosphere, strategies, infrastructure, and liquidity. In response to the question of how do they source their funds over the past years, 20 percent of them said that at least 50 percent of their share had come from their real estate, 17 percent of them said that 50 percent or more had been taken from selling other crypto and digital asset investments. The same percentage said this about selling commodity holdings, and 15 percent said half of their new crypto investments had come from selling private equity holdings. However, only 12 percent of investors said that this level of investment had been made by selling equity holdings, and the corresponding figure for fixed income investments was 13 percent.

Nickel added that they currently have four funds investing in the digital asset space: Digital Asset Arbitrage Fund, Diversified Alpha Fund, DeFi Liquid Venture Fund, and Nickel's Digital Gold Institutional Fund. The Digital Asset Arbitrage Fund is a complete return policy without expressing directional views on the underlying crypto-assets market. It hunts market inefficiencies and price dislocations and harnesses swings of instability to deliver consistent positive returns within a strictly defined risk management framework. Diversified Alpha Fund is a non-directional multi-strategy fund that wraps a collection of attractive but hard-to-access and capacity-constrained strategies into a single, investible fund. The strategies it positions are high-frequency market-making, statistical arbitrage, relative value, and volatility arbitrage. DeFi Liquid Venture Fund is planned to capture the growth potential of the broader digital assets space outside Bitcoin, noticing early winners in Layer 1 protocols and Decentralized Finance, the area of greatest financial innovation. Nickel's Digital Gold Institutional Fund, a bitcoin tracker, offers physically allocated Bitcoin security, efficient, transparent, and liquid. It offers institutional-level trade execution precision seven days a week at one of the lowest expense ratios in the business.

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