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Quantitative systematic crypto traders receive over USD100 million of allocations from Nickel Digital 

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Nickel Digital Asset Management writes that independent crypto traders face significant challenges in raising capital.

“Establishing a hedge fund is both costly and time-consuming, and generally requires 10s of millions in AUM to cover operational and compliance expenses. Traditional capital introduction services, which typically provide funding for startup funds, are not offered by conventional banks due to the absence of crypto prime brokerage services.” 

The firm writes that it has successfully allocated over USD100 million to quantitative systematic crypto traders through its Diversified Alpha fund. “This milestone highlights Nickel’s continued expansion and strategic commitment to deploying capital to high-octane trading strategies, reinforcing its position as a market leader in digital asset management.”

Nickel writes that its Diversified Alpha fund uses a managed account structure to provide funding to an actively expanding global community of quant digital asset managers while allowing allocators to maintain tight risk oversight of their funds. This structure facilitates trading on leading spot and derivative exchanges while leveraging Nickel’s advanced trade execution platform, the firm says. 

Nickel writes that at the core of its offering is its cutting-edge technology platform, which enables managers to send trading signals to Nickel’s execution system, supported by real-time risk management and margin management systems that operate 24/7/365. “With a streamlined onboarding process refined over years, Nickel aims to have promising managers begin with test allocations within a few days, ensuring robust risk assessment based on internally gathered risk information and track record before full deployment.”

Since its inception, Nickel writes that its approach has delivered impressive returns, with allocators earning an estimated 50 per cent (net) since the fund’s inception in 2021, and 18 per cent (net) year-to-date. “These robust results reflect the efficacy and resilience of the quant managers and Nickel’s risk management systems,” the firm says.

“Nickel’s model provides fund managers with unmatched independence and benefits. Key advantages include a transparent performance fee structure and full control over trading strategies within defined risk limits and capital allocations. Nickel guarantees not to copy trade, or impose non-competes or lock-ins, ensuring managers retain ownership of their intellectual property.

“Having allocated resources to over 20 managers, Nickel is actively engaged in further selection of outstanding systematic managers to scale up highly performing teams. This ongoing expansion aims to harness diverse expertise and further enhance the fund’s performance.”

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