Digital currency hedge fund calls it quits after BTC price drop

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Adaptive Capital is reportedly shutting down and returning the rest of its capital to investors.

According to The Block, the firm sent a letter to investors in which it admitted it “took a big hit” following a drop in BTC price during the March 12-13 trading sessions. The digital currency dipped to a low of $3,775, a price point that hasn’t been seen since last April. 

“Adaptive has made the decision to close operations and return the remaining funds to investors,” the firm wrote in a letter cited by the outlet. “We are convinced that the risks of continuing operations in such an unstable environment outweigh the potential benefits.”

Additional reports circulating online say the firm came out of the market drawdown down over 50%. The firm’s leadership also blamed the inadequate infrastructure of leading crypto exchange for its inability to respond appropriately to the BTC selloff.

“A number of respectable exchanges, platforms, and tools that we use daily have halted their operations during the selloff, significantly hindering our ability to act accordingly,” Adaptive letter also stated.

Adaptive didn’t state the name of the exchange, but the market event coincides with the problems Hong Kong-based Bitcoin Mercantile Exchange (BitMEX), experienced that day. BitMEX said it had system issues with its cloud service provider, which caused requests to be delayed from 02:16 to 02:40 UTC. BitMEX later added that two DDoS attacks at 02:16 UTC and 12:56 UTC, 13 March 2020, created the hardware problems. 

Adaptive Capital billed itself as a multi-strategy digital currency hedge fund with a deep focus on on-chain analytics. The downfall of the firm can be linked to their misguided BTC maximalist stance and ignoring analytics, which illustrates how BTC could not scale. 

Murad Mahmudov, a Princeton University-graduate who had brief stints at Glencore and Goldman Sachs, managed the firm. In an August 2019 tweet, Murad bizarrely predicted a $100,000 price target for BTC. Like so many other showmen in the BTC community, he failed to explain how the digital currency, with no real-word utility, would reach this high target. 

As BTC promoters and barkers continue to peddling false hopes in the face of rejection by the mainstream audiences, the excitement is building again for Bitcoin, now trading as BSV, as more and more crypto exchanges such as NovaDax and Vite Labs trade the digital currency. 

The Bitcoin SV (BSV) blockchain continues to position itself to play a role in the technologies of tomorrow. BSV is increasingly becoming the blockchain of choice, offering efficient, low-cost payments while facilitating micro-transactions and fast processing through large block sizes.

Digital currency Investors looking for a professionally run hedge fund devoid of greed and naivety should look no further than the Bayesian Fund SPC. The Bayesian Group had assembled an all-star team of engineers and quants. To ensure transparency, they will regularly hash their audit logs and publish them top the blockchain.