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As more institutions enter the space, probably good time to talk about BTC treasury management. In past year, our team have reviewed over 180 crypto quant funds in China and around the globe. Here are few interesting differences between Crypto quant funds in China vs West
Quick background: Bixin fund of funds currently manage around 7000 BTC, and only invests in BTC denominated quant funds.
In China, most managers we spoke to had background in software engineering (not finance) & in other regions, most managers came from traditional finance. This is interesting because of the difference in strategies being deployed.
In China, most funds are BTC denominated. In other regions, we saw mostly USD denominated funds until Q2 2020, starting Q2 this year, more BTC denominated funds started to emerge. Signaling entrance of western institutional investors to BTC denominated world.
In China, most fund managers offered managed account, meaning...BTC never left our custody (under exchange account) & in other regions, we needed to invest at least certain amount of BTC to qualify for such personalized services.
To be fair on last point, most managers in China offered managed account services to comply with regulations. “Not managing a centralized pool of funds means your not running a fund”(not legal advice)
In China, most managers deployed arbitrage funds, in other regions, we saw fund managers with multi-strategies (trend, option, market netural, statistical arb, long/short..etc). We did also expand our investment mandates accordingly as we deployed to more international managers.
This sector is rarely talked about at the moment, but as more institutions enter the space, I’m sure the need for BTC denominated treasury management will increase.
