Skip to main content

Invictus and the Next Frontier of Crypto Investment

Investors often have to endure shifting narratives when it comes to bitcoin-driven markets. Asset prices rise and fall. Returns are made and lost. Future projections show promise but are mired in uncertainty.
- Invictus and the Next Frontier of Crypto Investment

Investors often have to endure shifting narratives when it comes to bitcoin-driven markets. Asset prices rise and fall. Returns are made and lost. Future projections show promise but are mired in uncertainty.

There have been myriad reasons suggested for bitcoin’s price fluctuations. News of hacked exchanges or new government regulations can send bitcoin’s price bouncing around like a person on a pogo stick. These ebbs and flows signal an ongoing challenge for those keeping a watchful eye on the current landscape.

The good news is that advancements in crypto asset fund products are reaching full bloom, providing investors with innovative approaches to navigating this nascent world of digital money.

At the epicenter of this movement is Invictus Capital, a cryptocurrency investment firm offering a suite of fund options for those seeking to diversify their exposure to crypto markets. By employing cutting-edge data science, machine learning and blockchain-driven approaches, the company aims to take the bias, emotion and cost out of crypto investing.

Invictus is widely recognized for having created CRYPTO20, the world’s first tokenized, data-driven cryptocurrency index fund. Its other signature product, the Hyperion Fund, is a syndicated venture capital offering that provides a diversified portfolio of early-stage investments in the blockchain space.

A Fund for the Era of Bitcoin

Historically, the broader crypto market has been heavily influenced by bitcoin price fluctuations. Since its inception, bitcoin has been in a leading position, a trend that has been waning over time.

With this, Invictus Capital has maintained a thoughtful, fluid approach when it comes to responding to investor needs. Now, on the heels of CRYPTO20, Invictus has recently pioneered a fresh, cutting-edge fund known as CRYPTO10 Hedged (C10).

“C10, which is powered by data science, tracks the top 10 crypto assets, providing investors with long-term capital growth potential and superior risk-adjusted returns relative to pure crypto exposure,” Daniel Schwartzkopff, CEO of Invictus Capital, said. “It offers a dynamic cash hedge which provides drawdown protection for preserving capital in times of market stress.”

Schwartzkopff, a South African serial entrepreneur who has minted several venture capital–backed companies over the years, noted that this new fund is not a “direct upgrade” of the CRYPTO20 product and is intended to exist alongside it as a fully differentiated offering. CRYPTO20 is a closed-ended fund and the maximum token supply is fixed — existing investors often find it challenging to grow their stake in the fund as the number of participants willing to sell is limited. C10 Hedged allows investors direct liquidity to buy and sell C10 tokens through a smart contract. Exchanges are no longer required for liquidity on the buy or sell side; C10 may be listed for convenience’s sake, but Invictus will not actively pursue listings. This protects investors from having to deal with liquidity concerns and potential slippage in executing a trade in addition to exchange deposit/withdrawal fees.

Having navigated through bull and bear markets, the fund was designed with a rule-based algorithm that tracks the underlying market while incorporating a dynamic cash hedge that buys or sells a proportion of the fund value into or out of cash.

“Preservation of capital is extremely important, and this all-weather type of product is intended to manage downside risk for those who do not want to do so on their own,” Schwartzkopff said.

Fostering Education

The team at Invictus Capital believes that providing up-to-date information to support investors in their market understanding is a foundational element of their value proposition. It’s here that Invictus has developed a series of specialist education courses designed to provide an in-depth understanding of the ever-evolving cryptocurrency landscape.

Known as IN Education, these courses are run in conjunction with the global education platform Udemy. Current course offerings include the Bitcoin Course, which is designed to educate and highlight methods used to measure the growth or value capture of the Bitcoin network.

Invictus has also established educational partnerships with a number of top cryptocurrency foundations.

“We have been engaged by some of these foundations to develop and promote educational course material focusing on their projects — with budgets generally exceeding $100,000,” Schwartzkopff explained. “The Invictus community will be offered access to this educational material with participants incentivized to successfully complete the course.”

Bitcoin’s Enduring Market Impact

In reflecting on Invictus’s advancements, Schwartzkopff offered some important perspectives on bitcoin’s impact during the most recent crypto bear market.

“Following a price decline near the end of 2018, cryptocurrency prices remained in a depressed range for the rest of Q1 2019,” he said. “Bitcoin dominance was very stable and fluctuated between 50.1 percent and 53.5 percent of total market capitalization over this period.”

He believes that this dominance is an extremely important indicator of the crypto market in terms of risk-on appetite and market structuring. He said that with the fluctuating market, participants are often quite hesitant and unsure of what 2019 will bring.

Schwartzkopff asserted that some in the “bitcoin maximalist” camp still embrace the notion that bitcoin will be the sole cryptocurrency used in the future. He, however, believes that the more likely scenario is that various crypto assets will exist alongside each other, each with their own core strengths and attractors.

“First is not necessarily best — similarly, many in tech believed that MySpace’s traction was too great to be supplanted,” he said. “This was, however, shown to be false with the subsequent meteoric rise of Facebook.”

According to Schwartzkopff, the aim of an index fund is “not to try and predict which crypto assets will ‘win out,’ but rather to track the performance of the market, irrespective of the adoption path of individuals assets.”

It’s a philosophy that has shaped the Invictus approach.

“If one believes that multiple crypto assets will exist long term, but is not able to predict which ones, then an indexed approach is likely to yield the best results,” Schwartzkopff said. “C20 is an extremely effective passive investment vehicle for exposure to the cryptocurrency market. It provides an excellent and cost-effective proxy, outperforming bitcoin the majority of the time and providing risk diversification from holding any single asset. We look forward to furthering our positive market movement in 2019 and believe that the crypto-asset world will continue to build the foundations for future wide-scale adoption.”