Shanghai’s Point95 Global To Launch Cryptocurrency Trading Fund With Licensed Asset Manager
Shanghai Based Point95 Global To Launch Crypto Trading Fund
A digital asset management firm based in Shanghai, Point95 Global, has disclosed that it will be launching a cryptocurrency trading fund. Co-founder and chairman Ye Jingyuan said that the firm is yet to reveal the name of the asset manager who will be running the trading fund but has said that the partnership will be based out of Hong Kong.
The private fund is targeted at professional investors and is going to utilize arbitrage trading strategies. Arbitrage is the exploitation of an observable price inefficiency and, as such, pure arbitrage is considered riskless. In practice, arbitrage is more complicated, but three trends in investing practices have opened up the possibility of all sorts of arbitrage strategies: the use of derivative instruments, trading software, and various trading exchanges. Currently, Point95 Global is already trading top 10 cryptos with arbitrage trading which has used the banks own seed funding funds of $3 million.
Most experts who are familiar with this deal foretell that the firm will be a sub-adviser of the new fund. The unmanned asset manager will be the main fund manager and distributor. The starting capital for this new fund is $30 million.
Notably, Hong Kong is starting to tighten its screws on crypto trading. Their Securities and Futures Commission (SFC) has stated that any crypto funds from Hong Kong require funds to licensing to obtain special licenses. Now, Point95 Global’s fund will be required to get the licensing to operate legally.
In 2018, the number of crypto funds has been rising despite the value of Bitcoin is less than lucrative. According to Circuit Partner, the appropriation rate of cryptos has been increasing and people are looking for new ways of increasing businesses. Institutional infrastructure is also been developed and new professionals who have vast experiences in blockchain technology are moving into this space.