UK hedge fund raises $50 m for crypto investment fund

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Nickel Asset Management, a UK licensed hedge fund, has raised $50 million for a fund aimed to make profits off the volatility of cryptocurrencies, Coindesk reports.

The firm said on Monday that it has now “soft closed” its Nickel Arbitrage Fund to new investors, just two months after launch. Other funds and family offices in the UK, Europe, North America and Singapore contributed to the new crypto fund.

Nickel is regulated by the Financial Conduct Authority, and the firm says the arbitrage fund strategy “harnesses the extreme swings in crypto markets to deliver low-volatility, consistent performance.” It has built its own automated trading systems, and claims that by investing in only those digital assets that have active futures and swap markets, it maintains “an overall market-neutral exposure to volatile crypto-assets,” according to a press release.

Alek Kloda, portfolio manager at Nickel, said, “As long as digital assets and their derivatives trade on multiple exchanges across the globe, with sufficient speed and execution quality, we can profitably make markets, while improving liquidity for other market participants.”

Nickel also said it offers a solution for managing digital assets on multiple trading platforms. “Until now, hedge funds have been using a self-custody model for digital assets. Since blockchain transactions are irreversible, the risk of a single point of failure has been the key reason for institutional investors avoiding exposure to the asset class at any significant scale.” The press release also revealed that the firm is employing multi-signature security to ensure no single party can move funds individually, and restricts movement of funds to a pre-approved white list of addresses.

Anatoly Crachilov, Nickel Asset Management CEO, said: “Our vision is that it’s simply a matter of time until digital assets become part of institutional portfolio allocation for forward-looking investors around the world, and we aim to build an institutional-quality gateway to this high-octane world of digital assets.”

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