Cryptocurrency hedge funds are nothing new, but when individuals are leaving traditional finance to set them up then you know something is changing. Eugene Ng, a Deutsche Bank derivatives trader for four and a half years, left the bank earlier in 2018 to establish Circuit Capital, a cryptocurrency hedge fund based in San Francisco and Singapore, with former Tikehau Capital analyst Aaron Tay. The establishment of the fund comes at a time when cryptocurrencies have been on a year-long downtrend, but this hasn’t stopped Ng and Tay from raising interest and, more importantly, capital to fund the venture.
The Crypto Migration
Talent leaving more secure positions in finance, computing, and other established sectors for the wild ride of cryptocurrency is a trend that has been growing over the years. With Coinbase particularly making waves by hiring high-powered individuals from the likes of Fannie Mae, Pershing LLC, LinkedIn, and Amazon.
Ng and Tay’s altogether riskier move has raised eyebrows partly because of the stakes involved, but also because cryptocurrencies are not currently the money-making entities they were in 2017. Ng doesn’t see this as a problem however, stating, “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.”
The Long Haul
Circuit Capital aims to raise £30 million initially and grow assets to the $100 million range, something that is certainly possible with cryptocurrencies, assuming the market isn’t set for a prolonged bear market. Ng isn’t interested in the short-term though, stating in a Medium article that “We (at Circuit Capital) believe that blockchain technologies will disrupt global socio-economic foundations to create trillions of dollars in value in the long term.”
Like many smart investors, Ng is thinking about the marathon rather than the sprint, something that might give the community hope as they await a turnaround of cryptocurrency’s fortunes.