Most people don’t have access to hedge funds. Not unless they have a high net worth and no immediate need of their money. Hedge funds enforce what is known as a “lock-up period,” during which time you cannot withdraw any of your cash. They also require a significant investment, sometimes in the millions of dollars.
But that’s all beginning to change…
Just as cryptocurrency is providing opportunities for the unbanked, and allowing small investors to get in on the action, tokenized hedge funds are appearing to level the playing field further.
What Are Tokenized Hedge Funds?
Tokenized hedge funds, or hedge funds that exist in a token framework, lower the barriers to entry and remove liquidity issues by using a FOF (Fund of Funds). For Example, The Apex Token Fund is tokenized using its Ethereum powered APEX token, allowing individuals to access a varied investment portfolio–without having to invest a large sum of money, or agree to a lock-up period.
Chris Keshian, Apex Token Fund CEO and Managing Partner explains:
“Apex Tokens are freely tradable, so you could trade your shares in the fund when the fund launches. There’s no lockup period, shares are liquid from day one.”
Anyone can hold multiple shares in the hedge fund and include smaller investors, removing the minimum and “democratizing access” to top hedge funds.
But Are Hedge Funds And Crypto Really Compatible?
At first glance, markets like cryptocurrency with such in-and-out trading and volatile prices seem incompatible with long term investment strategies. However, times are beginning to change. Investors are making smarter, more educated decisions for the longer term, rather than expecting overnight rewards.
Will the Apex Token Fund go the distance? Keshian believes they will. After all, investors who want exposure to this kind of asset class probably aren’t going to focus on short term investing. They could, but there is little incentive to do it. Placing their money in a hedge fund like this one gives novice investors access to expertise and diversified exposure in an unpredictable market.
Hedge Funds in a Bear Market
Investing in a hedge fund is particularly attractive in a bear market, because you are privy to leading trading strategies that are being carried out for you, such as arbitrage and shorting, which can still make money in a bear market. “Holding $APEX tokens gives investors capital managed by professionals, who are engaged with the crypto market full time,” Keshian says.
