Willemstad, Curaçao – August 1, 2022 – PYGG Securities Co. B.V. (“PYGG”) announces the launch of its virtual asset investment funds that operate exclusively on the Ethereum blockchain. The funds offer investors access to virtual assets (a.k.a. cryptocurrencies), real-time performance insight, 24/7/365 deposit and redemption functionality, and blockchain-based custody.
“We are proud to be the first mover in offering virtual assets funds within the Curaçao financial community”, says Cees Quirijns, director of investments at PYGG. “By making innovative use of the blockchain we can offer investors advantages that are simply unprecedented in traditional fund management.”
PYGG’s virtual asset investment funds live on the Ethereum blockchain in the form of smart contracts that are programmed to handle the funds’ operations such as fund administration and custody of virtual assets. Investors can deposit into the funds via their Ethereum-wallets and redeem their participations whenever they want. Quirijns: “ With our virtual asset investment funds, lock-ups, fund manager redemption approval, and nine-to-five service levels are things of the past.”
To facilitate real-time deposits and redemptions, net asset values (NAV’s) are calculated in real-time. That is possible because the underlying assets of the funds are not held by a third-party custodian, but on the Ethereum blockchain instead. Investors simply deposit cryptocurrency from their Ethereum-wallets into the virtual asset funds and get fund participations in return. Redeeming fund participations results in direct payment of cryptocurrency into the same wallets. Quirijns: “Although PYGG determines the funds’ investment policies, the fund participants have full control by being able to monitor performance, deposit, and redeem 24 hours a day, 7 days a week, 365 days a year.”
Cryptocurrencies are known for their enormous volatility and high risk compared to other securities. “That’s why we generally advise our clients to only allocate a small fraction of their portfolio to virtual assets provided their risk profile permits such an allocation. Volatility is the price you pay for returns. Virtual assets offer significant profit potential compared to other securities. It’s all about finding the right balance between risk and reward”, according to Quirijns.
Although many individual investors already have experience with self-directed investment in cryptocurrencies, the financial industry has been slow to offer professionally managed fund alternatives. Quirijns: “Virtual asset funds only attract a relatively small amount of capital which makes it difficult to operate them profitably. The low hanging fruit is generally in traditional securities. There are some good existing crypto fund initiatives out there though, but they mostly require high minimum investment amounts. By going the blockchain-based route, our funds solve that issue: they are very cost effective to run and therefore don’t require high minimums. That means through our funds a portfolio of any size can now gain some exposure to managed virtual assets.”
Under the umbrella of its Virtual Asset Investment Funds (“VAIF”), PYGG launched two strategies: VAIF Income and VAIF Growth. VAIF Growth aims to generate returns from taking directional exposure in virtual assets based on fundamental and quantitative analysis. VAIF Income aims to generate yield from virtual asset lending and liquidity providing. Quirijns: “You could say that VAIF Growth is our high-risk virtual asset fund with asymmetric return potential and a multi-year horizon. VAIF Income is our low-risk alternative where directional exposure to virtual assets is limited, resulting in a more moderate expected return and volatility.”
For more information on PYGG’s virtual asset funds, including investment memorandum, please surf to www.pygg.nl/VAIF