A blockchain-focused fund that says it deploys a “traditional Benjamin Graham, Warren Buffet approach to investing in blockchain-based assets” has been able to outperform Bitcoin five out of five years with less volatility, according to its press release.
Off The Chain Capital, a fund with $339 million in assets under management, announced that is has averaged 133% per year since its inception in 2016. GOBankingRates reached out for comment but has not heard back yet.
“Bitcoin has been the best performing asset class 10 out of the last 12 years and has the highest Sharpe ratio than any other asset,” Brian Estes, CEO and CIO of Off the Chain Capital, said in the press release. “Our goal is to outperform bitcoin with less volatility, and we have done that on a consistent basis.”
Estes said that the firm has been able to accomplish these goals by securing mispriced digital assets and acting as a liquidity provider to employees and seed investors looking to exit their positions in prominent blockchain companies.
The firm said that since inception, the fund has also outperformed the S&P 500 by 3,653% and is 99.99% uncorrelated to the S&P 500, according to the release.
According to its website, the fund embraces the value investment philosophies of Graham, Buffett and Charles Munger, and “strives to provide downside protection without sacrificing upside growth.”
The fund can accept qualified purchasers and its portfolio allows for exposure to blockchain companies and assets such as Digital Currency Group, Polychain GP, Kraken, Mt. Gox Bankruptcy Claims, Binance, Osprey, Core Scientific, Bitpay and mispriced digital assets.
According to CNBC, the fund aims to buy one dollar’s worth of blockchain assets for 50 cents and make returns on the purchase of the assets, rather than buying them at fair market value and letting them rise. This way it can apply a value approach while capturing the growth of the still-young industry.
For example, Off the Chain was a big buyer of shares of Mike Novogratz’s Galaxy Digital two years ago, which went for about 70 cents then, Estes told CNBC.
Silvergate Bank is another company being mispriced, according to Estes. The crypto-friendly bank went public two years ago and was valued as a bank, when it operated like a crypto company, CNBC said.
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