The falling prices of digital currencies are not the best gauge on what’s actually happening in the crypto space. This is the belief of Circuit Capital founders, a new hedge fund that is surprisingly bullish on the industry despite the market’s failure to retrace January’s massive correction.
Adoption of Cryptocurrencies Continues to Rise
Circuit partner Eugene Ng believes that focusing too much on the falling price of cryptocurrencies might have diverted people’s attention from the positive developments happening in the space. For instance, Ng argues that adoption has actually been growing non-stop the entire time. This explains why most crypto businesses are gearing up for expansion if they have not already done so, as well as the movement of talent into the industry.
Ng told Bloomberg that:
“Despite what is happening with prices, we’re seeing adoption growing and a lot of people are looking to scale crypto businesses. We are starting to see talent moving into this space and institutional infrastructure developing.”
Circuit Capital’s Index
Circuit Capital is a new crypto hedge fund that will be based in both Singapore and San Francisco. The fund, which will be launched in January 2019, has already developed an index which also tracks the level of adoption of the blockchain technology that supports a particular crypto.
Circuit measures the level of mainstream adoption based on more than 10 data points. These include the tokens hash rate, transaction volume, web searched of articles on the specific crypto, the number of active crypto wallets as well as the hiring of tech and financial professionals. Based on these metrics, Circuit’s index reveals that crypto adoption is rising despite the lack of upward price movement for most cryptos.
The crypto hedge fund will raise $30 million by its launch next year to increase its assets to over $100 million. Eugene Ng, a former Deutsche bank derivatives trader, will run the fund’s Asian office along with Aaron Tay, an ex-Tikehau Capital analyst. Meanwhile, the company’s US office will be run by venture capital investors Bo Nam and Richard Jahnke.