The emergence of cryptocurrencies has allowed literally anyone to dip into asset trading. Still, one needs professional guidance to trade efficiently. Otherwise, there is a huge risk to find oneself out of pocket on such a complex and volatile market.
This is why firms providing service of asset management in the crypto area are on the rise. One of the pioneers in this sector is the Blockchain Fund (BF) company, which was launched in February 2016.
Record growth and the promising market
Initially, the fund accepted capital ranging from $100 thousand. Though in 2017, it adopted the Bitcoin philosophy on a full scale and lowered the minimum deposit amount to $100, making its services accessible to different retail investors. Today, the fund delivers its services to more than 5,500 clients. An opportunity to invest in digital assets has become a main idea and advantage of the company, as its co-founder Andrey Karpukhov told Newconomy media.
Another co-founder Kirill Muzhikov added that a strict policy of diversifying risks, combined with the broad range of investment strategies has become another major advantage.
This approach made it possible for the BF to increase the number of its customers’ assets by 5000% in 2017 alone. That profit may be far from the classic financial markets but it was fueled by the growth of the cryptocurrency market in the same year.
Even with the factor that fund gains half of the investor’s revenue, it is still an extraordinary opportunity, especially given that the traditional funds usually require a minimum threshold of investment set in tens of thousands of dollars. Karpukhov points out that this measure essentially brings along an inequality:
“Roughly speaking, it creates opportunity for reach people, but middle and lower classes are still cut off from the investment world.”
Fund’s strategies and services
Cryptocurrency funds, like BF, could finally fix that major issue. Moreover, the fund offers a “self-sustaining” franchise business. How does it work? An investor needs to register on the Blockchain Fund website. Then he should buy a cryptocurrency on his own and transfer it to the BF, which takes care of funds.
Muzhikov listed available products:
“First, we offer asset management pegged to the US dollar price. Then, there is asset management linked to the Bitcoin price growth rate. Also, we invest in venture capital. Furthermore, we provide one-year deposits with 18% income per annum. The deposit is frozen for a one-year period, with 1,5% of the total amount being paid off monthly.”
In a latter case, payouts are guaranteed and do not depend on the fund’s results as they are insured by the reserve fund, which constitutes 10% of all assets. Muzhikov claims that the BF will not offer this product if its total amount exceeds the one from a reserve, to keep this insurance policy working.
In addition, there is a partnership program, when a customer may bring a new client and then have a share from his assets’ profit, gained by the fund.
The blockchain technology for the transparency
Thanks to the DLT, each BF’s customer receives in return a specific token that represents a constant share in the certain investment strategy, thus making it similar to the unit trust.
The token makes the actual price of assets in a personal account on the BF website visible. So any customer can check his balance any time, which is a big difference compared to the legacy funds, Muzhikov underlined:
“Every client can see what happens with his investment every day, not in a month or a quarter”.
Wherein, the fund’s team admits that the balance can show different dynamics from day to day, ranging from the surplus to the loss. Muzhikov added:
“It is fine because we are not some financial pyramid, which shows large profits all the time. We stand strongly against the Ponzi schemes.”
He notes that the BF has also set up its own software that shows all trading activity, as well as incoming and outgoing transactions.
Currently, the BF is diversifying its portfolio by adding products related to the classic markets like the stock market and Forex.
Until the end of this year, the firm plans to create software that will allow managing assets without having access to the clients’ funds. In particular, the company aims to provide ERC-20 standard tokens to the clients in exchange for assets that may be exchanged by the customer at any moment through a special smart contract.
The Blockchain Fund is also targeting at a record volume of investment along with enhancing its franchise network. As for now, this network consists of about 1,500 participants.
“We are also going to invest in the real economy, following requirements of our customers,” Karpukhov concluded.