When it comes to coin tracking solutions they are mostly aimed at retail investors. That’s because the market was originally driven by this capital. In 2020 this paradigm shifted due to many factors, out of which the most important ones were the recognition of cryptocurrencies as a viable alternative investment among funds and regulatory advancements.
Many private and public companies have started investing and holding Bitcoin but the tools that support these operations are still lagging behind. The problem with crypto transactions has always been around tracking and maintaining data on the price and date of purchase for accounting and tax purposes. Even though there have been many advancements in this sector, one kind of entity that operates in the crypto industry has been neglected, and those are cryptocurrency investment funds.
Besides having reliable data on the price and time of purchase to keep track of their profitability and staying compliant with authorities, they also have to be transparent and accessible to their main stakeholders – investors.
Crypkit has been building a solution for crypto funds, and besides plain coin tracking for crypto assets it has in mind the liability to funds investors. One of the most important benchmarks of success investors look at when choosing a fund is their Net Asset Value (NAV). This is so because investors look at the NAV to determine the “per-share” value of the fund.
NAV per share = (Assets – Liabilities) / Total number of subscribed shares
In traditional markets NAV is calculated monthly or daily after the market closes. But the cryptocurrency market is 24/7 which means that this is always at float. Most of the current solutions rely on manually calculating the NAV at the end of the month which brings a lot of limitations in fund management and stakeholders management.
This is why we have developed a real-time NAV calculation for our fund management product that no other coin tracker has. We present you with a case study of Sigil fund from which you can see what kind of benefits this enables in fund management and dealing with investors.
Sigil fund’s results
We spoke with Pavel, the CEO of Sigil fund. Sigil is the very first Crypkit Fund customer who has operated on Crypkit Fund platform for more than 2 years. Crypkit tooling enabled Sigil to automate the admin work and focus on delivering a great performance to its investors – in 2018 a loss of -40.5%, in 2019 a profit of +67.6% and in 2020 a YTD (Year-To-Date) profit of +244%.
We asked Pavel a simple question:
Among all of the features that Crypkit offers, what’s the business relevance of having real-time NAV available 24/7?
In reply Pavel told us:
- We saved money on NAV calculations. Without Crypkit, we would have to rely on the fund administrator to crunch .csv sheets with the crypto prices and transactions. They would calculate NAVs for the fund and respective investor portfolios. This manual process is time consuming and thus expensive for the fund. With Crypkit we have NAVs automated in the real time. Our fund admin supplier works with the Crypkit system now in a leaner process that is convenient for them and cheaper for us. It is scalable for both sides. We still need our fund administrator in many ways, but Crypkit eliminated the mundane manual component of NAV calculations.
- We can process deposits and withdrawals every day. As a fund you can only accept new investors and deposits when you know your exact NAV. In other words there must be no “pending performance” of the past, so that the new investors receive adequate value in participation shares in your fund against their deposit. For this reason most crypto funds normally allow investors to deposit or withdraw once in a month, because their fund admin runs the NAV calculation only monthly. With Crypkit we have the NAVs real time 24/7. It allows us to onboard new deposits anytime. This agility and flexibility certainly has a price tag. It generates business value because you have no admin obstacles in your investor relations.
- Our investors can view their portfolios real time. Crypkit allows every investor to watch their portfolios 24/7 via their own personalised LP login. This also means we have no more questions about „what is the performance“ or „how much do I have in my portfolio“? This saves an incredible amount of time in the investor relations process.
- Enhanced trust via full transparency. If you can grow trust in your business relationship, you should always do it. This is especially true in wealth management which is all about trust and risk management. In Sigil we have an extremely low withdrawal ratio from the fund. I believe the culture of transparency contributes a great deal towards this.
- Better decision making in portfolio management. With Crypkit dashboards we have amazing oversight about our treasury, portfolio composition and newly also about DeFi rewards. Thus we are able to instantly view our portfolio composition and performance of its parts. This enhances our decision making process and allows us to produce better performance for our investors.
- Performance reporting: Crypkit offers performance charts and tables. This allows you to stay on top of your growth and performance internally – you can compare period with a period, compare number of new investors or deposits per quarter, per month, per year – whatever you like. You can also benchmark your performance against BTC, ETH or any other crypto currency or fiat benchmark. These data are priceless for the routine internal debates, but also valuable if you want to share interesting KPIs with your (prospective) investors.
- Access to historical data: Crypkit doesn’t only show us the present data. We can easily view our historical data via calendar filter. Crypkit saves a snapshot of the portfolio every day so we can go back to it and view our historical portfolio, deconstructing the changes in time. This is especially useful for audits by independent parties or backtracking to find potential mistakes in manual entries.
An open invitation
The best part of this feature is that it’s automatic. When you import all the data on to the platform this is calculated and updated on its own and no further action is needed on your part. This trumps every other solution out there be it from traditional or crypto space. To find out more, see this short explainer video.
We invite you to take a look for yourself risk-free and sign up today for a free trial. Only do the initial work of importing all the data and our platform will do all the rest. In this way you can save time but also increase your accessibility to investors which translates into increased profitability. If it works for Sigil fund it will surely work for you.