Veteran Crypto Traders Raise 1,000 Bitcoin for BTC-Denominated Fund

While the world of finance still revolves around fiat currency, crypto hedge fund BXB Capital is taking a different approach with its latest fund: it is raising capital exclusively in Bitcoin, which will also be the sole instrument of its trading strategy. .

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In an exclusive interview with Fortunefounders JJ Petersen and Alex Friedberg said they already have around 400 bitcoins – worth around $10 million – committed by investors, with a plan to raise up to 1,000 bitcoins and launch the fund in July.

Petersen and Friedberg began to negotiate the so-called kimchi bountya strategy that exploited cost differences between the spot price of Bitcoin in South Korea and other markets and was made famous by traders such as Capital of the Three Arrows and Sam Bankman-Fried Alameda Search.

“There weren’t a lot of people in 2017 and 2018 doing things at scale,” Petersen said. “And that put us in a lot of rooms.”

In 2019, Petersen and Friedberg spear KRWb, the first stablecoin backed by the Korean won. They were also co-founders of Binance KR, the Korean branch of the crypto exchange giant, which farm in 2020 after eight months of operation due to low transaction volume.

Apart from other businesses, Petersen said BXB Capital continues to use its own capital to implement proprietary trading strategies. While many crypto hedge funds focus on arbitrage and market making, or help facilitate liquidity on exchanges, BXB Capital focuses on pattern recognition.

The new fund represents BXB’s first major foray into raising outside capital — Petersen said the limited partners, or investors, are high-profile crypto figures, but declined to name any — so than a new operating structure thanks to its prominence of Bitcoin.

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Many cronies argue that Bitcoin is a safer asset to hold than fiat currencies like the US dollar. Because Bitcoin has a fixed limit on how much will ever be mined – 21 million – it is a deflationary asset, unlike the dollar, whose money supply is constantly expanding.

“You basically have to win [more] dollars to outpace inflation,” Petersen said. “If you earn more Bitcoin, you simply own your token, so you increase your total percentage of circulating supply permanently.”

The fund takes a unique approach by having its LPs invest directly with Bitcoin, with all trading strategies and returns also in Bitcoin. Petersen said many native crypto investors don’t want to hold more dollars, so the new fund gives them the opportunity to earn in Bitcoin without having to commit to loans or yield products.

BXB Capital will focus on futures trading on margin, meaning it will pledge collateral to open larger positions in the future price of Bitcoin. The company is registered in the British Virgin Islands, which allows it to use crypto-trading strategies that are restricted to the United States.

“There are very few funds that view Bitcoin as the asset you want to get the most out of,” Petersen said. “People are starting to change their frame and not just trying to acquire more USD or fiat wealth anymore.”

This story was originally featured on Fortune.com

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