Secretive Cryptocurrency Hedge Fund Metastable Examined

Fortune has published an examination of a secretive cryptocurrency hedge fund that is backed by some of Silicon Valley’s top venture capital firms. The fund was co-founded by Naval Ravikant, Joshua Seims, and Lucas in 2014, and has produced returns of over 500%.

Also Read: Hedge Funds Are Quietly Investing in Bitcoin

“There’s a Handful of, Say Between Five and 10 of These… [Cryptocurrencies]… That Could Be Trillion-Dollar Blockchains” – Joshua Seims, Metastable Co-founder

Metastable Capital is a cryptocurrency hedge fund that has attracted investment from many top venture capital firms despite largely shunning publicity since its inception in 2014. Metastable was co-founded by Angellist CEO, Naval Ravikant, cryptography expert, Lucas Ryan, and former angel investor, Joshua Seims.

Fortune has reported that Andreessen Horowitz, Sequoia Capital, Union Square Venture, Bessemer Venture Partners, and Founders Fund are among Metastable’s major investors – all of whom participated in Polychain Capital’s fundraiser earlier this year.

Metastable takes a long term perspective when assessing the markets, aiming to invest in projects that it expects will be profitable over the course of at least a decade. “There’s a handful of, say between five and 10 of these major use cases that could be trillion-dollar blockchains,” Seims told Fortune. “It’s all very long-term focused, and we think we’re in super early days right now. It really comes down to which do we think is the strong enough technology, that we think can win.”

Metastable’s Flagship Cryptocurrency Hedge Fund Has Yielded Impressive Performance Throughout 2017

Metastable’s website describes two funds offered by the firm, Metastable Balanced, and Metastable Edge. The ‘Balanced’ fund seeks to “take a value-investor approach to investing, guided by deep technical understanding of the protocols to select a portfolio that we believe will deliver the greatest returns”, holding a large portion of bitcoin, in additional to several smaller sized positions in major altcoins. ‘Edge’ is “designed for investors that already have substantial Bitcoin holdings”, and “holds ETH and a variety of smaller coins from more recent ICOs”, although “the ETH portion fluctuates based on whether we believe that the value from new coins is going to accrue to the new coin or to ETH”.

Metastable’s flagship cryptocurrency hedge fund has yielded impressive performance throughout 2017. At present, Fortune asserts that Metastable’s ‘Balanced’ fund is invested in approximately a dozen different markets, including bitcoin, ethereum, and monero – of which it is reported to own roughly 1% of total supply. During mid-March, Metastable reported returns of 539%, however, since March, bitcoin, monero, and ethereum have more than doubled – prompting Fortune to estimate Metastable’s returns since inception are greater than 1,000%. On June 23 it is alleged that Metastable reported total assets of $69 million.

Metastable requires a minimum investment of $1 million, and charges a 2% management fee and a 20% performance fee.

Do you think that cryptocurrency funds will continue to out perform mainstream hedge funds in coming years? Share your thoughts in the comments section below!

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