Classifications of Crypto Funds

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Last updated 2 years ago

Classifications of Crypto Funds

Crypto funds are broadly classified as venture capital and private equity funds, hedge funds, mutual funds, and exchange traded funds (ETFs). The only difference is that all or most of the underlying assets managed by crypto funds are cryptocurrencies.

Venture capital funds and private equity funds Crypto VC funds invest in early stage blockchain companies' equity, or the tokens they issued, and also utilize various resources to assist the growth of the companies listed on their portfolio. On the exit strategy, in addition to traditional equity transfers, mergers and acquisitions, or IPOs, crypto VC funds exit mainly by selling their portfolio companies' tokens on cryptocurrency exchanges. Some of the most well-known crypto funds are a16z, Drapper Dragon, Distributed Capital, etc.
Hedge Funds Crypto hedge funds do not differ much from traditional hedge funds, but the only feature is that the products and varieties traded are focused on crypto assets. Since the crypto asset market is still young and the market is not yet wide and deep enough, the volume and influence of pure crypto hedge funds in the market are relatively small and the industry is still a herd.
Mutual Funds and ETFs Compared with venture capital and private equity funds, the biggest difference between mutual funds and ETFs lies in their openness and liquidity. Generally, mutual funds and ETFs can be redeemed at any time after a very short lock-up period. VC and private equity funds have a closing period of more than 1 year or even 3 years. Mutual funds and ETFs require a high degree of liquidity in the assets invested because they are subject to redemptions by investors at any time, and therefore can also calculate net asset value (NAV) on a daily basis. is regulated by CEZA and Fincen institutions, audited by Certik, and can be shelved for all kinds of funds and ETFs. crypto asset mutual funds have gradually sprouted and developed in recent years, and will start to show vigorous growth in 2022, becoming an important channel for traditional financial institutions to enter the crypto world.

PreviousReasons to Invest in Crypto Funds NextCommon Strategies for Cryptocurrency Funds

Last updated 2 years ago

Venture capital funds and private equity funds Crypto VC funds invest in early stage blockchain companies' equity, or the tokens they issued, and also utilize various resources to assist the growth of the companies listed on their portfolio. On the exit strategy, in addition to traditional equity transfers, mergers and acquisitions, or IPOs, crypto VC funds exit mainly by selling their portfolio companies' tokens on cryptocurrency exchanges. Some of the most well-known crypto funds are a16z, Drapper Dragon, Distributed Capital, etc.
Hedge Funds Crypto hedge funds do not differ much from traditional hedge funds, but the only feature is that the products and varieties traded are focused on crypto assets. Since the crypto asset market is still young and the market is not yet wide and deep enough, the volume and influence of pure crypto hedge funds in the market are relatively small and the industry is still a herd.
Mutual Funds and ETFs Compared with venture capital and private equity funds, the biggest difference between mutual funds and ETFs lies in their openness and liquidity. Generally, mutual funds and ETFs can be redeemed at any time after a very short lock-up period. VC and private equity funds have a closing period of more than 1 year or even 3 years. Mutual funds and ETFs require a high degree of liquidity in the assets invested because they are subject to redemptions by investors at any time, and therefore can also calculate net asset value (NAV) on a daily basis. is regulated by CEZA and Fincen institutions, audited by Certik, and can be shelved for all kinds of funds and ETFs. crypto asset mutual funds have gradually sprouted and developed in recent years, and will start to show vigorous growth in 2022, becoming an important channel for traditional financial institutions to enter the crypto world.