Of Bitcoins 2024 Fast Approaching – July 25-27 in Nashville, TN – three enterprising fund managers will compete for $1 million in seed funding in the Bitcoin Alpha Competition driven by Samara Alpha Management in association with Bitcoin Magazine Pro.
In a recent podcastBitcoin Magazine spoke with the Bitcoin Alpha Competition judges about the state of the Bitcoin market and how individual investors are using their flexibility to beat larger investors as Bitcoin enters the era of institutional adoption.
Patrick Lowry, Bitcoin Alpha Competition Judge and CEO of Samara Asset Groupbelieves that while Spot ETFs have been a roaring success, trillions of dollars of institutional capital have yet to seize the opportunity in “the greatest form of money mankind has ever devised,” largely due to both the regulatory and organizational burden. This has given smaller organizations – family offices and individual investors – the opportunity to seize the opportunity.
Lowry commented on his experience at Deutsche Digital, one of Europe’s first Bitcoin ETP issuers: “I can attest to how hard it is to become an asset manager. It’s incredibly difficult to start and establish your own asset management company. I can’t even tell you how many times I’ve had my nose bleed by an ungodly amount of regulators and compliance officers.”
“So one of the things I’ve always wanted to do is empower new managers, emerging asset managers, in this asset class that I believe strongly in. (Help) them in a way that they don’t have to go through the same obstacles that I did six, seven years ago.”
In addition to Lowry are Adil Abdulali, CIO of Samara Alpha Managementand Jack Elliot, CTO of Animus Technologies and winner of the first Bitcoin Alpha competition.
Abdulali, who brought his decades of experience in the hedge fund industry to the table, noted that Bitcoin offers a unique risk profile compared to traditional assets with its increased volatility. This volatility, especially to the upside, reduces the need for leverage to generate returns. Abdulali believes that removing the need for leverage offers capital allocators a unique option compared to fixed-income arbitrage, saying:
“Anytime you have a non-leveraged strategy that is also generating high returns, and there is a pullback… you don’t have to liquidate. You can stay in the trade for as long as it lasts… any kind of leveraged strategy, no matter how safe you think it is, is eventually going to be susceptible to (what’s called margin).” This ostensibly offers a new way to manage investment risk and another tool in the toolkit when looking for returns.
While Bitcoin has certainly benefited from the improved sentiment surrounding Donald Trump’s positive comments on the asset as of late, even these kinds of moves can pose risks for fund managers. Jack Elliot, a CTO focused on optimizing his firm Animus’ AI-based strategies, noted the importance of being flexible and resilient to tail risk when it comes to modeling and trading the Bitcoin market.
“It’s just recognizing the reality… this is a space that is extremely young and extremely fast-moving and there are going to be a number of different factors that are going to change the way the market behaves. And some of those are going to be incremental changes… and I think there are going to be a number of those factors going forward… For us, it’s about staying on the horse… it’s a fun problem because (modeling the market) is unmanageable.”
On July 25, Lowry, Abdulali and Elliot will select the winner of $1 million in seed funding, which will help an entrepreneurial fund manager scale their fund strategy. The winner will be chosen from the following three finalists:
- Boreal.xyz
- L1 Yield
- Capital of Hill Valley
The Bitcoin Alpha competition is one of four tracks in the larger scheme Bitcoin Pitch Day 2024where top founders and projects in the field of Open Source, Mining + Energy and Layer 2 + Scaling present their vision to leading venture capitalists and the public.
Bitcoin Magazine is owned by BTC Inc, which also owns and operates the largest Bitcoin conference in the world: The Bitcoin Conference.