Cryptocurrency investment firm Hypersphere has announced the launch of a new fund, Atlas, with $130 million in assets under management (AUM). The fund aims to generate profits from crypto assets using a Wall Street-style strategy, it said in a statement released on Wednesday.
Launched in stealth mode in January and funded from Hypersphere’s balance sheet, the Atlas fund is staffed by former employees of high-frequency trading firm Millennium and hedge fund Bridgewater. These experienced professionals are expected to bring their expertise in sophisticated trading strategies to the emerging crypto market.
Hypersphere plans to use a multi-manager approach, a strategy used by Millennium and Bridgewater to offer investors niche trading strategies while minimizing volatility. The Atlas Fund is designed as an open-end liquid fund that allows investors to open and close positions quickly.
Hypersphere founder Jack Platz described Atlas as “two bets in one.” The first bet is to offer a diversified range of trading strategies, and the second is to focus on finding attractive opportunities in the cryptocurrency market. Platz highlighted the main difference between traditional and digital asset trading: the ability to close trades quickly. This feature is crucial for high-frequency trading (HFT) strategies.
For Atlas to be successful, it will need to leverage a centralized exchange that can support HFT strategies. While institutional exchanges exist, they are generally not designed to handle the rapid capital movements required by hedge funds that use HFT. This means that a platform like Coinbase could be important to Atlas’ operations. However, it remains a key question whether cryptocurrency exchanges will embrace HFT, which could increase market volatility.
The introduction of HFT into the crypto market could lead to increased both volatility and liquidity. For Bitcoin investors, this raises a critical question: is the potential for increased volatility a worthwhile trade-off for the additional liquidity?
The concept behind Atlas is promising, but its success will depend on the necessary infrastructure and willingness to support HFT in the crypto market. As Hypersphere moves forward with this innovative approach, the industry will be closely monitoring how these strategies evolve and what impact they have on the broader cryptocurrency landscape.