Cryptocurrencies are attracting more investors by establishing themselves in the media and financial landscape. It seems that these active ingredients are still relevant despite theyes prices falling from January 2022. The regulatory aspect is also a form of barrier to entry for long-term investors. Recently, the largest fund manager Blackrock partnered with the company Coinbase. The purpose of this investment fund is to offer bitcoin to its customers. This trend is accelerated by the arrival of a new fund: GSR Capital Limited.
What is GSR Capital Limited?
On August 3, 2022, the digital asset trading company GSR Capital launched GSR Capital Limited focused especially on institutions and family offices. In 2013, the company was founded by former Goldman Sachs executives. Its purpose is to traditionally associate with cryptocurrency projects. Concretely, the group provides liquidity on the markets, especially for Binance, Coinbase and FTX. These entities are today leaders among centralized exchanges. Development of the fund began last year when a research and development team was recruited. Two funds have been put together: One is focused on bitcoin exposure, the other on a broader market.
According to GSR CEO Jakob Palmstierna, the company already has a lot of interest from family offices and institutional investors. The latter requires exposure to digital assets given their inherent volatility and potential gains. One of the best ways to gain exposure to a new asset class, he says, is through allocation to an investment manager. The new fund comes in response to a lack of options for investors in the crypto ecosystem.
GSR Capital Limited: betting on a risky market
GSR Capital wishes to reassure traditional investors who are interested but cautious about investing in this new asset class. The aim is, therefore, to lend credibility to these assets by emphasizing knowledge of traditional finance. However, prices in the cryptocurrency market fell significantly in the context of geopolitical news. However this fall is multi-factorial and the collapse of LUNA also led to a decline in investors. We can also mention the bankruptcies of certain investment funds that had significant media coverage, such as the one of Three Arrows Capital. Still, the CEO remains confident because of the opportunities inherent in blockchain technology, the deep talent pool in the industry, and the $36 billion in venture capital invested last year. According to him, the combination of these three elements is an indicator of significant growth in the future.
The challenge: Reassuring investors about bitcoin (BTC)
Although digital assets can be esoteric, the company wants to be part of the crypto ecosystem for the long haul and has created an experience that makes more traditional investors feel familiar. The goal is to make the experience transparent and comfortable for investors and especially for institutions. They have to face many challenges, especially in terms of investment analysis, governance and due diligence.
The rapprochement between DEFI and traditional finance is accelerating but does not erase the systemic differences between these assets. As the business grows, two more funds are expected to be launched alongside GSRT in 2022.
So the conclusion is this: Investors are desperately looking for new sources of significant returns. The new fund aims to meet this need and attract investors in a cautious market. Despite the current bearish market, this trend is emerging more and more clearly. Some of them are particularly exposed to this market today. This is the case for example with the investment fund Ark where Cathie Wood takes a pro tech position.
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Sami AYADI
As for the angels of intervention in the current monetary system, I oppose DeFi, digital assets and the metaverse. Lawyer in Luxembourg, I am interested in cryptocurrency investment funds.
