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Take advantage of the returns from Bitcoin and SP 500

November 8, 2020

Bitcoin has been one of the most powerful assets in the world since its inception in 2009. The price of the digital currency rose nearly 9 million percent between 2010 and 2019. Simply holding or averaging Bitcoin (BTC) positions creates a certain profit parameter. It can be difficult to find an investment or trading strategy that outperforms Bitcoin A financial fund called Off The Chain Capital has claimed to do just that. The fund has also outperformed the SP 500, a popular index of the general financial markets, although the SP presents itself as a less formidable opponent in terms of price gains.

“It’s easy to outperform the stock market because When we look at Bitcoin in relation to other assets like dollars, gold, stocks, and bonds, Bitcoin absorbs all of the value of it“Brian Estes, the fund’s founder and chief investment officer, told Cointelegraph. Bitcoin naturally offers higher returns than other major financial assets such as stocks and gold, he explained, adding,”The hard part is beating Bitcoin“.

Estes founded Off The Chain Capital in 2016 as a financial fund open only to friends and family. A few years later, the fund allowed other members of the public to invest, Estes said. “We now have more than 90 partners in the fund,” he said. “The reason I decided to open the fund to outside investors was as follows I finally figured out how to beat bitcoin“.

The strategy

Take advantage of the returns from Bitcoin and SP 500
Take advantage of the returns from Bitcoin and SP 500

CT: Can you explain how the fund works? For example, what’s behind the scenes and how do you feel about it?

BE: What I found is that The best way to outperform Bitcoin is to buy Bitcoin below what other people could buy or sell, above the spot market. We find ways to buy Bitcoin at a discount, and We find ways to buy bitcoin at spot prices and then additionally sell it to people who are willing to pay us a premium for bitcoinAnd that’s pretty much all we do deep down inside. So we are a value investor in bitcoin and blockchain assets.

CT: When you under buy and over sell, are you talking more about long term promotions or short games?

BE: We don’t act. Our average holding period is more than 12 months, so we are not traders. We do not use leverage. We don’t use the portfolio to outperform Bitcoin. We use a traditional method, Graham-Dodd, Warren Buffett, to buy Bitcoin cheaply.

We are one of the world’s largest buyers of Mt. Gox bankruptcy filings. So if you buy a Mt. Gox bankruptcy filing from people who are entitled to the company, our average cost is about $ 1,000 per lawsuit, and we get nearly $ 3,000 in net worth.

Those assets within a claim are 0.1785 Bitcoin, 0.18 Bitcoin Cash and there is around $ 784 in cash in currencies. If you add it all up, it works out to be about $ 3,000. As I said, our average cost is $ 1,000. These claims will eventually be paid over the next several years, and Even if bitcoin doesn’t move, we have almost tripled our money because we buy this bitcoin at a discount through these claimss.

The legacy of Mt. Gox continues

Mt. Gox started out as one of the earliest bitcoin exchanges. The market ran from 2010 to 2014 and eventually ended in disaster. The exchange suffered an infamous hack in which criminals reportedly stole around 850,000 BTC, leading to the exchange’s demise in 2014.

Fast forward to 2020, and the authorities are still sorting through the rubble and aftermath of the affair. Part of the process was for victims who have lost money due to the Mt. Gox issue to file claims for damages. Companies like Off The Chain Capital are trying to buy these lawsuits or profit claims, albeit in the form of belated gratification.

Basically due to the bureaucracy and legal process surrounding Mt. Gox, this one Claims are not paid immediately and have suffered many delays. Nobuaki Kobayashi, Mt. Gox Rehabilitation Trustee, is overseeing the process. The payment of claims has suffered several delays. Kobayashi must present a plan of action to the courts. Recently, The proposal expiration date was changed from October 15th to December 15th.

In addition to Mt. Gox’s claims, Off The Chain Capital has other strategies, although the company does not disclose these tactics to the public.Estes explained. Off The Chain Capital isn’t the only player interested in this type of finance game, but still.The Fortress Investment Group is another example from a company that has expressed an interest in purchasing Mt. Gox claims.

The purchase of Mt. Gox Claims will benefit both parties

Buying these claims also helps the victims of the Mt. Gox Odyssey. You can get compensation for your losses by selling your accounts receivable sooner, albeit at a discount..

CT: So the Mt. Gox claims: The reason they’re getting the discount is because they won’t get paid in the distant future, right?

BE: Exactly, yes. In order to, We give people liquidity. You have a claim, so you get cash and $ 1,000 per claim. What we get is value. We get a value of $ 3,000 but we get illiquidity. Hence, they are illiquid investments until the Japanese trustee decides to distribute what they hold out of bitcoin, bitcoin cash, and currencies. When that happens, we become fluid. We are ready to be illiquid in exchange for the return, for a return three times higher. It’s a good exchange for us.

This also benefits the people who sell the receivables because they have been around for almost seven years.. Most of the people who sell them have been presented with events in their life. They need the money so they can happily sell it and have someone to sell it to. They get married, have a baby, buy a new home or wreck their car and need cash.

CT: Do you have any idea when the claims will be paid? Are they all paid at once or are they paid every two months?

HIS: The Japanese trustee was due to update the distribution plan on October 15th. They postponed it to December 15thSo we will have more clarity on December 15th. It’s just an assumption. Some think of six months, but we plan about two years, hoping it will be a year or less, but it could be another three or four years. Nobody really knows.

This interview has been compressed and edited for reasons of clarity.

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