Canada crypto fund holds 90% of assets in fiat currencies

July 18, 2018
Chris Wheal

While crypto market watchers look for signs of increasing institutional involvement in the growing digital asset sector, the latest news from  Canada’s Rivemont Crypto Fund is likely to disappoint.

Canadian crypto fund has only 10% of its holdings in cryptocurrencies

Interviewed by Bloomberg on Tuesday, the $2.3m fund’s portfolio manager Martin Lalonde said that around nine-tenths of its total managed assets was currently held in fiat currencies.

Not a huge commitment to the cryptocurrency sector, it appears, for a fund registered by Canada’s various securities regulators to trade in assets such as bitcoin, ethereum and litecoin, as well as altcoins such as neo and d, Bash and also initial coin offerings (ICOs).

Weak markets

A fund’s premium duty to its investors, however, is to maximize returns and it the cryptocurrency market, since the fund’s establishment in December 2017, has simply not performed well enough.

While the crypto market has rallied in recent days, with bitcoin moving back above the $7,500 level for the first time since 10 June, it remains 62% down on its December peak close to $20,000.

Lalonde said that he had invested more than half of the fund’s assets in bitcoin and ethereum when bitcoin rose above technical indicators on 4 July, but moved back into cash on 10 July after the indicator fell back.

Martin Lalonde

He told Bloomberg: “The cryptocurrency market right now is not really in a bull market, so people are waiting to see if it’s going down further.”

Upbeat on the future

While this might seem like a weak commitment to the cryptocurrency market from an institutional investor, Lalonde is upbeat about the fund’s – and the digital asset market’s – future.

“Those who think that interest in cryptocurrencies is running out of steam are not watching closely. The opposite is happening,” he said.

The interview continued: “We’re very bullish, we thing it could easily double or triple from where it is now.”

Dwindling fund interest?

But the number of funds entering the market appears to be slowing. Autonomous Research reported earlier this year that as of April, the number of crypto-focused funds was estimated at 251. Out of these, 175 were launched in 2017, while just 26 have been established in 2018.

However, the big guns are on the sidelines. BlackRock, the world’s largest provider of exchange-traded funds, said on Monday it was forming a working group to assess how it can “take advantage” of cryptocurrencies and blockchain technology, while investigation the work of its rivals in the sector.

BlackRock chief executive Larry Fink said later, however, that while the company was a “big student” of blockchain, he didn’t see “huge demand for cryptocurrencies”.

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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