HOW DO YOU CREATE A CRYPTO HEDGE FUND?

In an investment fund, the investor generally does not make decisions as to what the money gets invested in or how it should be invested. The fund typically will present its strategy, fees, risks, and focuses to investors and the manager of the fund will make decisions as to what assets should be bought and sold. The profit that the fund makes is then distributed back to the investors, minus the fees from the fund. This is no different in a cryptocurrency fund, a fund may choose to invest in a certain cryptocurrency and trade them on an exchange in an attempt to build profit from the purchase and sale of crypto.

The most common type of fund that we see is a hedge fund. Hedge funds typically “hedge” their bets by covering a wide variety of industries and assets. They will often times purchase assets which they expect to increase in value while shorting assets which they expect to decrease in value in order to mitigate the probability of significant losses. With the right manager and structure, funds can be beneficial for the manager and the fund investors; the manager makes money by drawing fees and small percentages for their work in managing the fund, while the investors have the potential to make money on their investment with little to no effort involved on their part.