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Blockchain is a shared, immutable ledger that records transactions and stores information. Pixabay

Digital assets have been dubbed as risky investments due to their historical volatility. For this reason, heavyweight billionaire investor Warren Buffett has publicly denounced the asset class. The blockchain-focused hedge fund adviser Off the Chain Capital uses Warren Buffett’s investment strategy to identify undervalued assets in the blockchain space.

Learning from Buffett's successes….and mistakes

Off the Chain Capital seeks to generate value by identifying undervalued equity in blockchain companies and digital assets. Much like Buffett, the adviser ignores short-term market volatility and instead focuses on long-term profitability. Unlike many in the crypto world, Off the Chain ignores trending tweets, ‘memecoins,’ and social media hype.

The adviser follows Buffett’s own advice when he says “If you aren’t willing to own a stock for ten years, then don’t think about owning one for ten minutes.” Of course, there is an irony in using Buffett’s own strategy to invest in an asset class that he himself wouldn’t touch.

Yet Buffett has also been wrong in the past. In fact, Buffett publicly admitted that he made a mistake in not buying Google shares years ago, and remains stunned that Jeff Bezos succeeded on the scale he has. Despite being a Google customer himself, Buffett has admitted that he avoided technology stocks because he didn’t understand how they make money.

However, hedge fund advisers like Off the Chain Capital focus on alternative investments in digital assets and blockchain projects. Off the Chain proudly invests in premier blockchain companies in the post-series A stage to minimize start-up risk. The adviser seeks out profitable companies with a positive free cash flow that are on a one-to three-year path towards liquidity.

Less risky and more profitable than Bitcoin

According to Off the Chain, LP has averaged 133%(1) per year since its launch in 2016. Bitcoin itself has averaged 108% year-on-year (YoY) over the same period(2). The fund’s CEO & CIO Brian Estes says “If you want to invest in a professionally- managed fund, that fund should be able to outperform Bitcoin.”

Off the Chain hasn’t just outperformed Bitcoin, they do it with 70% less volatility. That’s what makes the fund an ideal option for first-time blockchain investors, endowments, and funds. Off the Chain appeals to conservative, first-time investors by not only managing funds, but by offering education and advice on the growing asset class. In short, they are capitalizing on the huge opportunity in blockchain with a mature and time-tested formula.

Because of their unique approach, Off the Chain Capital has reached the number one performing blockchain fund ranking in Hedge Fund Research (HFR), a leading provider of hedge fund index information, database(3). According to third-party verified results(4), Off the Chain has outperformed the S&P 500 by 3,653%(1).

Off the Chain Capital manages the fund to address volatility. They exercise caution in how they invest; however, they remain bullish on what they are investing in. Brian Estes says “I think in 2030, when 90% of U.S. households in the United States are using Bitcoin, then it becomes a stable part of the world economy."

Estes’ prediction is being validated faster than expected. The Central African Republic is now the second country, after El Salvador, to adopt bitcoin as its national currency. As a result of the high inflation sweeping across the globe, Estes expects this trend to continue.

According to Crypto.com’s ‘Crypto Market Sizing’ report, the global crypto population increased by 178% in 2021, with crypto users totaling almost 300 million. The number of crypto users is expected to break one billion by the end of 2022. Global crypto ownership rates are predicted to hit 1 billion by the end of 2022–accounting for 1/8th of the world’s population. 5 Cryptocurrency and its underlying technology blockchain are now firmly placed in the mainstream. By offering an alternative to speculative crypto day-trading, Off the Chain is supercharging the technology's explosive adoption.

By focusing on well-established investment strategies with revolutionary technology, Off the Chain’s potential is equally matched with Bitcoin itself. Buffett may well be forced, yet again, to look back in regret.

Disclosures:

1) From December 31, 2016 through February 28, 2022. Performance is net of fees, such as advisory fees, and also expenses, such as commissions or other Fund expenses that the Fund would have paid. Performance from December 31, 2016 through January 2017 represents proprietary account activity. Performance from February 2017 through June 2018 and August 2019 to February 28, 2022 represents actual Fund performance. The performance included in the annual return and five year track record for the period July 2018 through July 2019 represents hypothetical performance for the Fund. Please contact lp@offthechain.capital for additional information pertaining to the factors used to calculate such performance.

2) Calculated from bitcoin price data on coinmarketcap.com from December 13, 2016 through February 28, 2022.

3) Ranking data as of February 28, 2022 in the HFR database. HFR single-manager funds report to the HFR Database monthly, net of-all-fees performance in US Dollars and have a minimum of $50 million under management or a twelve (12) month track record of active performance.

4) GIPS verification performed by Assurance Accounting Group

5) https://blog.crypto.com/global-crypto-owners-near-300-million-predicted-to-hit-1-billion-by-the-end-of-2022