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Seeking Alpha 2021-07-01 15:29:23

Crypto hedge fund moves into cash after its stalwart trade falters - Bloomberg

Vertigo3d/iStock via Getty Images Nickel Digital Asset Management's flagship arbitrage-strategy fund shifts largely to cash after a reliable trade that had been producing double-digit annual gains stopped working after the crypto selloff earlier this year, Bloomberg reports. Still, Anatoly Crachilov, the co-founder and CEO of Europe's largest regulated crypto fund, isn't fazed by the bearish crypto sentiment as he considers new opportunities to redeploy capital from its Digital Asset Arbitrage Fund. He expects the lull to end soon as institutional investors become increasingly interested in crypto assets. Until May, the fund relied on the basis trade, which takes advantage of discrepancies between spot and future prices. That profit generator turned off during the dramatic crypto selloff, which flushed out leveraged positions mostly held by retail investors, Crachilov said. He estimates that the amount of auto liquidations of speculative positions on May 19 along could be ~$9B. "June will be remembered

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