As Bitcoin tumbles, new fund offers crypto holders an easy exit

MANAGERS of a new investment fund have a message for those who made staggering gains from Bitcoin before the recent selloff: diversify and avoid the fate of early dotcom believers who were wiped out when tech crashed. "They need to diversify - take a portion of the profits and do what Mark Cuban did," says Marcus New, CEO and chief entrepreneur of InvestX Financial (Canada), referring to the billionaire who made his fortune in the early days of the Internet. "What we've tried to do is to make it really easy for them."

While a slew of funds already accept cash to invest in virtual currencies, Mr New believes that his fund may be the first to do the opposite: take cryptos to invest in a traditional asset class, in this case private companies about to go public. There's a reason most of the money has been going the other way. Nine funds buying digital currencies tracked by Eurekahedge Pte soared 1,167 per cent in 2017, trouncing the 8 per cent returns of hedge funds globally.

Vancouver-based InvestX says it's selling prudence, not the biggest returns, with its new fund that launches on Thursday for US and international investors, with a target to raise US$100 million. "Many of the people in cryptos are long-term believers that this asset class is going to make them hundreds of millions of dollars so they're shifting from bitcoin to other alternative coins," said Mr New. "I heard the exact same thing being said in the dotcom era except 'alt coins' was 'dotcom stock'."