Bitcoin Hedge Fund Up 2,129% Raises Concerns

With Bitcoin up a strong 321% year to date, cryptocurrency hedge fund manager John Chalekson looks like a genius. The crypto hedge fund, whose marketing materials for limited liability partnerships are available online, delivered 2,129% returns to investors basis August without using leverage. In fact, in May, Chalekson claims to have been up 273%, primarily by investing in new currencies. The man whose Facebook profile  lists himself as a “principal investigator at Wikileaks” and claims to use “deep web information flows” to conduct cryptocurrency analysis claims to have found success by picking little-known crypto-currencies at very low levels.

John Chalekson Photo via Facebook

Chalekson says crypto hedge fund low-risk investments can deliver big returns

Chalekson runs an unregistered hedge fund whose performance has yet to be audited. He is a busy man lately, as a recent ZeroHedge article generated significant new potential investors, which his voice mail message and publicly available marketing materials welcome.

(Separately, an unregistered US hedge fund soliciting US investors through the Internet or general promotional methods is forbidden by the US Securities and Exchange Commission as well as the Commodity Futures Trading Commission, although these laws are complex and were relaxed by the JOBs Act.)

In his marketing materials, Chalekson characterized cryptocurrencies as “low-risk, high-yield emerging market sector without geographic limitations.” In 2017 alone, the price of Bitcoin – not the most volatile cryptocurrency – dropped from $2,965 on June 11 to 1964 on July 16, then rocketed higher to currently trade just above $4,400 – a roller coaster ride investors might do well to understand before investing.

Despite the wild price movements in cryptocurrencies, he said that it “sounds crazy,” but low-risk investments do not have to have low returns, a claim that has not ever proven consistent in history. But this time it’s different, the crypto hedge fund manager claims, pointing to cryptocurrencies being embraced by banks and the financial mainstream as a sign a new era where the rules of investment gravity might not apply.