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Dmitry Perepelkin's Avatar
published in Blogs
Mar 13, 2021

What Top 5 Cryptocurrency Funds Think About Bitcoin

It’s not an overnight process. Mass adoption happens in stages. After closing out another strong performance week for Bitcoin and Ethereum, is it time to accept that the general public will soon be ready to embrace cryptocurrency as the exchange medium of the future?  

Let’s examine where we’re at. There are five stages to mass adoption. The first is the innovators. These are typically the younger folks who recognize potential in new technology. Their risk tolerance is high, and they have the financial resources to gamble on something new.

Innovators inspire early adopters, the second stage. Bitcoin reached this stage in 2013 when Coinbase sold $1 million in bitcoin in a single month for $22 per coin. Shortly after that, service providers OkCupid and Foodler (now Grubhub) began accepting it for payment.

Stage three is known as “early majority.” This is where innovators and early adopters are joined by a select group of investors who put their weight behind the new concept. With Bitcoin, that means cryptocurrency hedge funds. We’ve profiled the top five in this category. 

Digital Currency Group / Grayscale Investments

Founded in 2015 by Barry Silbert, Digital Currency Group is an early adopter with existing positions in Coinbase, Ripple, and Bitpay. Between 2016 and 2018, they invested in over one hundred cryptocurrency projects, with an average seed round of $3.24 million.  

Digital Currency Group has backed some of the most well-known start-ups in cryptocurrency, including Circle, Blockchain, Kraken, Parity, and Ledger. Grayscale, a division of DCG that invests directly in cryptocurrency, reported an AUM number of $2.7 billion in 2019. 

Grayscales Bitcoin Trust fund gained 300% in the first two quarters of 2019 and they reported that 84% of their investors come from the institutional space. Based on the phases of mass adoption, these numbers indicate that bitcoin is solidly in the early majority stage.  

Digital Currency Group may be the first company in the space to hold an IPO, possibly as soon as next year. With heavy exposure in both Bitcoin and Etherium, that could be the push needed for public mass adoption. The valuation is projected to be over $4 billion.

Polychain Capital

Founded in 2016 by Olaf Carlson-Wee, Polychain Capital is another crypto-focused hedge fund with a divested interest in Bitcoin. They currently have just under $1 billion in cryptocurrency under management. That’s up from $591 million just five years ago.

What’s interesting about Polychain is that their crypto funds receive significant backing from VC firms. They’re known for bringing a number of large players together on early funding rounds, including a $200 million round with Sequoia Capital and Union Square Ventures in 2017.

Polychain has invested in Coinbase, Kik, and Celo, among others. They were profiled in Fortune Magazine at the end of 2018 as being the first crypto fund to exceed the $1 billion aum mark. Today, they are known as a crossover firm with traditional financing backing their crypto assets.
In 2020, Polychain has invested heavily into DeFi. On November 13th, they dropped $8.2 million into the Etherium-based token yearn.finance (YFI). They are now the 10th largest holder of the token and the largest overall crypto hedge fund in the world. 

Pantera Capital

Founded as a traditional hedge fund back in 2003, Pantera Capital refocused their efforts ten years later to invest in crypto and blockchain technology projects. The move seems to have paid off, as they currently have over $700 million in assets under management.

Pantera Capital promotes itself on their homepage as the “first” US Bitcoin investment firm. Their Bitcoin Fund (PBF) was launched in July 2013 and is among the best performing investment funds ever across all asset classes. They are definitely all-in on Bitcoin.

As a pioneer in the crypto investing space, Pantera has recruited investors from multiple segments, including many firms outside of the typical blockchain universe. This is further evidence that Bitcoin is well on its way to mass adoption.

In July 2019, Dan Morehead, founder of Pantera Capital, predicted that Bitcoin would hit $42,000 by year’s end. That didn’t happen, but it opened at $18,165 this morning, up from $11,903 thirty days ago. We should see $25,000 in Q4. 

Morehead also predicted a bitcoin value of $356,000 by 2021. With Paypal’s announcement that they would be launching their own bitcoin exchange next year, we could see a significant price move. Will it get that high? It will be exciting to watch. 

Galaxy Digital

Bitcoin hit an all-time high of $19,260 on December 15, 2017. They bottomed at $3530 a year later. Somewhere between those two dates, former Goldman Sachs partner Michael Novogratz put together a $100 million crypto hedge fund called Galaxy Digital.

Novogratz weathered the storm and continued to invest in crypto- related projects. Among them were Bakkt, BlockFi, and Ripple. He did this by reaching out to noncrypto backers, investing his own money, and listing the company on Canada’s TSX exchange.  

Galaxy Digital can’t really be classified as an innovator or an early adopter, but they are part of the early majority that is driving mass adoption. By bringing in new players and putting his own personal assets on the line, Michael Novogratz is helping to move the needle.

Andreessen Horowitz

Marc Andreesen and Ben Horowitz are well-known in Silicon Valley. The Menlo Park based venture capital firm has piloted IPOs for big name tech startups like Box, Groupon, Lyft, and Facebook. They’ve been around since 2009 and they manage over $7 billion in assets.

The fact that an established VC like Andreesen Horowitz has thrown its weight behind crypto and blockchain technology is a huge step towards mass adoption. Among other investments, they partnered with Polychain in 2018 to put $15 million into Dfinity.   

Andreesen Horowitz has its own crypto investment fund called 16z that is worth over $300 million. That may not seem like a huge number when the firm manages billions, but its significant because this is a company not dedicated solely to crypto currency. 

Blockchain is Disrupting the Digital World

The final stages of mass adoption are the “late majority,” which is the group that’s been watching but not quite ready to jump in without more evidence, and the “laggards,” those who jump on the bandwagon once innovative risk has sufficiently dissipated.

With institutions putting their weight behind it and custodians offering more ways to securely enter the market, Bitcoin is solidly in the early majority phase of mass adoption right now. Blockchain technology is the primary disruptor in the digital world, and awareness is rising.

Behavioral analysis from the Bitcoin blockchain shows that 60% of investors are holding bitcoin for a year or longer. In 2012, that number was 30%. This year alone, 8.7% of bitcoin has been taken off exchange and is likely being held for long-term use. 

As Bitcoin phases into early majority and more value is transferred into its ecosystem, the volatility synonymous with this asset class should start to level out. That’s bad news for traders, but very good news for long term investors and late majority adopters. 

Using Bitcoin to Diversify a Portfolio

Though it’s been labeled a digital “currency,” Bitcoin and other crypto assets like Etherium, are now being treated as a separate asset class. They don’t quite fit as a commodity, aren’t subject to inflation in the traditional sense, and are not influenced by general market fluctuations. 

In a recent report published by Coinshares, the author states, “If we are to examine bitcoin in terms of its investability, we believe there is a necessity to classify bitcoin and its likely performance in a mature state, where investors are more settled as to its identity.” 

This is important. Bitcoin won’t reach its mature state until it passes through the early majority stage of mass adoption. From a chart pattern perspective, we’ve already seen a decline in volatility this year, but maturity only comes when that levels further.

Bitcoin in 2020 and Beyond

Overall, the gains on bitcoin in 2020 are astronomical. On January 1st, it opened at $7,182. This morning, it was over $18K, a gain of 128.65%. Long-term investors who hedged their portfolios with just 4% in bitcoin experienced an extra 10% net gain this year.

Does this mean you should go “all-in” on crypto and ignore more traditional investments? Of course not. The technology is still evolving and nothing in the investment game is a certainty. There is, however, a good chance you’ll make some money on this in the next few years.
To learn more about bitcoin and cryptocurrency investments, review Tickeron’s Bitcoin articles in the “Cryptocurrencies and Blockchain” section of Trading 101. You can learn all about bitcoin, blockchain, Ethereum, Ripple, and the taxes and regulations related to them.   

Related Ticker: BTC.X

Aroon Indicator for BTC.X shows an upward move is likely

BTC.X's Aroon Indicator triggered a bullish signal on February 27, 2024. Tickeron's A.I.dvisor detected that the AroonUp green line is above 70 while the AroonDown red line is below 30. When the up indicator moves above 70 and the down indicator remains below 30, it is a sign that the stock could be setting up for a bullish move. Traders may want to buy the stock or look to buy calls options. A.I.dvisor looked at 448 similar instances where the Aroon Indicator showed a similar pattern. In of the 448 cases, the stock moved higher in the days that followed. This puts the odds of a move higher at .

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

The Momentum Indicator moved above the 0 level on February 26, 2024. You may want to consider a long position or call options on BTC.X as a result. In of 133 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .

The Moving Average Convergence Divergence (MACD) for BTC.X just turned positive on February 27, 2024. Looking at past instances where BTC.X's MACD turned positive, the stock continued to rise in of 58 cases over the following month. The odds of a continued upward trend are .

BTC.X moved above its 50-day moving average on February 06, 2024 date and that indicates a change from a downward trend to an upward trend.

The 10-day moving average for BTC.X crossed bullishly above the 50-day moving average on February 07, 2024. This indicates that the trend has shifted higher and could be considered a buy signal. In of 18 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .

Following a +1 3-day Advance, the price is estimated to grow further. Considering data from situations where BTC.X advanced for three days, in of 441 cases, the price rose further within the following month. The odds of a continued upward trend are .

Bearish Trend Analysis

The RSI Indicator has been in the overbought zone for 1 day. Expect a price pull-back in the near future.

The Stochastic Oscillator entered the overbought zone. Expect a price pull-back in the foreseeable future.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where BTC.X declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

BTC.X broke above its upper Bollinger Band on February 26, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

Fundamental Analysis (Ratings)

Fear & Greed

Market Cap

The average market capitalization across the group is 1.12T. The market cap for tickers in the group ranges from 1.12T to 1.12T. BTC.X holds the highest valuation in this group at 1.12T. The lowest valued company is BTC.X at 1.12T.

High and low price notable news

The average weekly price growth across all stocks in the group was 9%. For the same group, the average monthly price growth was 36%, and the average quarterly price growth was 120%. BTC.X experienced the highest price growth at 9%, while BTC.X experienced the biggest fall at 9%.

Volume

The average weekly volume growth across all stocks in the group was 49%. For the same stocks of the group, the average monthly volume growth was 195% and the average quarterly volume growth was 147%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating:
P/E Growth Rating:
Price Growth Rating:
SMR Rating:
Profit Risk Rating:
Seasonality Score: (-100 ... +100)
View a ticker or compare two or three
BTC.XDaily Signal changed days agoGain/Loss if shorted
 
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A.I.Advisor
published price charts
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BTC.X and

Correlation & Price change

A.I.dvisor indicates that over the last year, BTC.X has been closely correlated with WBTC.X. These tickers have moved in lockstep 100% of the time. This A.I.-generated data suggests there is a high statistical probability that if BTC.X jumps, then WBTC.X could also see price increases.

1D
1W
1M
1Q
6M
1Y
5Y
Ticker /
NAME
Correlation
To BTC.X
1D Price
Change %
BTC.X100%
+4.70%
WBTC.X - BTC.X
100%
Closely correlated
+4.44%
BTCUP.X - BTC.X
99%
Closely correlated
+9.01%
NEXO.X - BTC.X
76%
Closely correlated
+1.28%
ETH.X - BTC.X
76%
Closely correlated
+2.06%
ETHUP.X - BTC.X
75%
Closely correlated
+4.31%
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