Countinghouse is a crypto hedge fund we featured back in December 2018 at the height of the crypto bear market, who were boasting returns that outperformed almost every other token in the crypto world. At the time of our report their fund had enjoyed an incredible 260% growth in the second half of 2018 at a time when most other tokens, including Bitcoin, were losing upwards of 50% of their value. The returns were almost too good to be true, so it’s time to check back in and see if all is still rosy in the Countinghouse garden.
The Scores on the Doors
Results-wise, Countinghouse has enjoyed a profitable 2019, with the fund seeing a 168% growth this year, assisted by the addition of an XRP trading pair. This has been only slightly bettered by Bitcoin’s 175%, although the weekly returns are noticeably lower than in 2018. Is this a sign that the trading strategy is no longer working? Partly. The team has admitted that the relatively disappointing results have been down to “gaps” in the crypto markets which don’t typically happen in forex markets, from which the algorithm was derived. This caused them to reduce their exposure, and therefore the levels of risk, which has seen the average weekly gain drop from an average of 3.71% in the first three months of 2019 to just 1.57% in the most recent three months. However, this has protected against potential losses so investors have no reason to complain – 1.57% compounding weekly gains are unheard of in traditional investment circles. With the crypto markets, especially Bitcoin, enjoying a mini-resurgence in 2019, being just a couple of percent behind Bitcoin’s return is pretty good going, especially as the fund is designed to beat the bear market and cannot generally outperform the likes of Bitcoin in a full on bull run. This has led to a Net Asset Value (NAV) of $4.80 per CHT token, an incredible 860% return so far for ICO investors.
Frozen Buybacks and Legal Troubles
This continual growth is great if investors are able to realize the profits, which worryingly is not the case with Countinghouse right now, and explains why the token can currently be picked up for just over $1 on exchanges. In March the team announced a shock restructuring of the fund due to legal reasons, halting buybacks in the process and cancelling those that were in the queue. This meant that investors could not sell their tokens for the NAV, restricting their sale to exchanges only, where the price quickly collapsed. This caused huge ructions within the community, with some immediately crying ‘scam’, not helped by a lack of communication from the team. The next six months saw few updates barring the occasional lawyer-approved letter, with the token price on exchanges dropping all the while and concern growing about the lack of transparency. The current situation is not much clearer, with the team recently presenting three options they were looking at – clearing the legal hurdles and continuing, selling the fund, or liquidating the entire fund and paying out at NAV. This has split the community once more, although the news that one of the fund managers is due to fly out to the Seychelles where the mechanics of the fund are handled for a series of meetings suggests that either a sale or a liquidation could be coming.
Investors Left in Limbo
With little by the way of concrete information, Countinghouse investors are currently in the same state of limbo that they have been since March, not knowing if their investment is going to be realized or sink without a trace. In theory all three options presented by the team should result in the fund’s true value being realized, but this is crypto, where the Wild West meets the 21st century, and where the word ‘should’ is all too often replaced months later with the word ‘didn’t’. Countinghouse investors will be desperately hoping that the numbers on their Excel sheets are true to life and there won’t be a race to the exchanges to make whatever value they can from the tokens as the fund collapses.