Crypto hedge fund Arca has closed its $20 million Digital Yield Fund, which also includes TerraUSD token investment, due to the current downturn in the market.
“TerraUSD Is Not The Reason For The Fund Closing”
Fund opened in September 2021 to TerraUSD was investing, but one source said it wasn’t the reason behind the shutdown that first reported the news. An Arca spokesperson confirmed the news.
Crypto hedge fund Arca closed its Digital Yield Fund less than a year after launch due to the overall market downturn, a person close to the company told CoinDesk.
According to the person in question, the fund had just over $20 million in assets under management at the time of closing, and that capital was returned to investors.
“After a strategic business review, we have decided to close our Digital Yield Fund, effective August 31,” Arca CEO Rayne Steinberg said in an email to CoinDesk.
“Given the changing market conditions, we believe this decision is in the best interest of our investors.”
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Arca announced its actively managed Digital Yield Fund in September 2021, targeting low double-digit returns. The gross asset value of the fund was $53 million as of June 30, according to the firm’s annual Investment Advisor registration documents.
In an investor letter sent in May, Arca stated that the fund’s TerraUSD (UST) has collapsed. to cryptocurrency announced its investment.
According to the source, this risk did not cause the fund to close, but rather was an example of market turbulence that shifted Digital Yield’s risk-reward balance. According to the source, Arca is still open to launching a similar product in the future.
*Not investment advice.