Nickel: Security issues hamper cryptocurrency investment

A new survey by Nickel Digital Asset Management (Nickel) has revealed that 76% of first-time cryptocurrency investors are hesitant about cryptocurrency due to scant regulations and market instability.  

The survey findings show that about the same percentage of participants felt bothered by liquidity and the size of the market, while 71% perceive the regulatory environment for the crypto market as a grave issue. 

In the light of the survey findings, Co-founder and CEO of Nickel Digital, Anatoly Crachilov commented that despite the increasing exposure of institutional investors to digital assets, concerns around security and custody remain a top worry for many allocators. However, in reality, the crypto industry has displayed viable progress on that front.

This is evident through the deployment of a range of sophisticated cryptographic solutions, MPC vaults, and distributed keys to form robust custody models. Besides this, the entry of BNY Mellon, State Street as well as Fidelity has reinforced the market structure. 

Adding to this, Nickel’s Head of Business Development, Henry Howell added that the security of clients is of paramountcy at Nickel. To ensure this Nickel deploys independent institutional-grade custody solutions in partnership with UK-based Copper and US-based Fidelity.

These solutions mitigate single-point failures since they are based on multi-signature, air-gapped, and cross-organisation custody models. This facilitates the joint control of assets which is retained by Fund Custodian and Independent Fund Administrator at all times. 

Types of Funds

Currently, Nickel has four types of fund investing in the digital asset space. These are, 

Digital Asset Arbitrage Fund

The first Digital Asset Arbitrage Fund is market neutral and pursues an absolute return strategy. Since its launch in 2019, the fund has delivered 95% positive months, with a volatility of 3.5% and a Sharpe of over 4%. 

Diversified Alpha Fund

Also known as the Digital Factors Fund, the Diversified Alpha Fund is a non-directional, multi-strategy fund.  It has high-frequency market making, volatility arbitrage, statistical arbitrage, relative value, and trend following. In May, the fund delivered an impeccable performance of over 4.7%, despite the underlying market going through one of the strongest corrections in recent years. 

DeFi Liquid Venture Fund

This fund is designed to track the growth potential of broader digital assets spaces beyond bitcoin, identifying early winners in Layer one protocols and DeFi. It is an actively managed and research-driven vehicle that aims to identify early winners and capturing the structural expansion of this space.   

Nickle Digital Gold Institutional Fund

A bitcoin tracker that provides secure, safe, efficient, and liquid access to physically allocated bitcoin. Nickle embodies one of the industry’s lowest expense ratios because it delivers institutional-grade precision of trade execution with availability of seven days a week.

Upcoming Fund

Slated to be launched in September 2021, is Nickel’s Defensive Bitcoin Fund. It seeks to proffer institutional-grade exposure to bitcoin, while on the side managing the downside volatility of such a portfolio.