I know that most readers here on Publish0x buy and sell cryptocurrencies directly, but I was struck by a webinar entitled "Crypto vs Crypto Funds - Strategies To Outperform The Crypto Wave: Self vs Professionally Managed" that was organized by ADDA. The fact that Sunil Kaushik - Senior Principal of Business Development at Gemini Asia Pacific - was one of the speakers captivated me. How would Mr Sunil weigh in on crypto funds since he was working in an internationally renowned crypto exchange and should push for retail investors to invest in crypto directly? I attended the webinar with high expectations. 

So what are crypto funds in the first place? Crypto funds are curated for more conservative investors who neither wish to stomach the highs and lows of the crypto market nor go through the hurdles associated with the buying/selling of digital assets on crypto exchanges. Given that increasing numbers of people are starting to jump on the crypto bandwagon, I was surprised to learn that crypto funds' cumulative assets under management (AUM) was super respectable. It amounted to over USD 25.1 billion in 2020!

The popularity of crypto funds was explained. Apparently, the world of crypto is brimming with infinite possibilities but it can be overwhelming for retail investors who are not used to this booming space. DeFi, smart contracts, NFTs, Play to Earn games, protocols - it is all enough to make one's head spin. Hence, they wish to engage third parties who have considerable experience in the crypto world so that they can outsource custodial responsibilities to these financial staff. This is especially so when they wish to take advantage of the volatile crypto market and make a killing in terms of profits within a short period of time.

An example of crypto funds is crypto venture capital funds, in which the fund managers do their due diligence and valuation before committing capital to certain projects or coins that ooze potential.

Sunil explained the pros of crypto funds. One advantage is that these funds comprise a basket of cryptocurrencies, so one can easily diversify his portfolio and gain a broader exposure to the crypto world without subjecting himself to much financial risk. In addition, crypto funds are professionally managed, so the fund managers know how to employ strategies like staking and yield farming. Other managers do direct spot buying or seek alpha on top of the crypto index through active trading. In any case, this may enable the funds to outperform not just the benchmarks they are expected to achieved, but also the profit margins attained by individual cryptocurrencies. 

However, he clarified that investors who wish to leverage market movements nimbly and have the time and energy to do their due diligence on the cryptocurrencies that catch their fancy should opt for direct exposure and buy crypto themselves. I believe that this speaks for most of us here! That's why we are on Publish0x to increase our head knowledge and heart resilience when it comes to crypto. Also, some people may not find it easy to trust fund managers to provide accurate fund reporting to investors because the latter may not have enough experience to arrive at a valuation of crypto funds, especially when the funds comprise different components like yield farming and NFTs.

Sunil was asked whether China's ban of cryptocurrency transactions would have a detrimental impact on the crypto world. He answered that given the increasing rates of crypto adoption, it doesn't seem that China's ban would have a substantial impact. Nonetheless, interested investors should be prepared to HODL their digital assets through such market downturns. He elaborated that Gemini is one of the most regulatory compliant exchanges around. Abiding by the regulations could lead to an increase in crypto adoption, which in turn would make the crypto industry more efficient and resilient.

Another speaker, Jon Deane - CEO and Managing Director at Trovio Group - even suggested that China's ban on crypto mining was actually a positive move for the future of Bitcoin because this forced the miners to move out of China and venture into other parts of the world. Thus, making Bitcoin mining more decentralized. Also, other countries function on democratic ideals and thus are less likely to ban a commercial entity like Bitcoin. I found his argument rather preceptive. 

This webinar made me realize just how little I understand about the crypto world. This is why my notes are less comprehensively written than I would like. Nonetheless, I tried to jot down my learning points as I trusted that I would come to understand some of these things in time to come. Perhaps you could share with me your knowledge so as to accelerate my learning process.