The Gadze Finance USD Market Neutral Crypto Yield Fund has raised $39.9 million from 70 investors since its launch in October 2021 according to a filing.
The fund started with $25 million, growing over the past year with a focus on creating challenged markets.
They claim in a prospectus “consistent returns since inception, even in the face of extreme market volatility with a low correlation between the USD fund and S&P or BTC”.
However, they had $5.4 million in FTX according to Mike Silagadze, the fund’s founder, best known for founding online textbook company Top Hat.
“We have worked so hard to mitigate risk, we have been thorough. All of our trading strategies did exactly what they were supposed to do and performed well,” said Silagadze.
However, it’s not easy to protect yourself from a stock market crash unless you take out insurance, but they’ve still done well considering it’s about 10% of assets.
They were shorting FTX as part of a hedging strategy, the very exchange where now-defunct hedge fund Alameda could, allegedly, see all the orders.
It is one of the first funds to invest in defi with the aim of generating a return, i.e. income, rather than asset appreciation.
We requested an update on their data regarding their performance in eliminating the FTX bear, but did not receive a response in time for publication.
Their prospectus values net returns at 6% in April 2022 during a period when prices were mostly down.
So it outperformed on the downside, but whether that means underperforming on the upside remains to be seen.