- A group of Cincinnati investors has launched its second cryptocurrency fund, claiming it to be the first of its kind in the country
- In addition to cryptocurrencies, the fund invests in a variety of other assets, including hedge funds, they have the option to get out fast if the market collapses, according to Buechner
- It’s possible that the bitcoin they paid at the start has risen in value, and the fund’s investments have profited
A group of Cincinnati investors has created its second cryptocurrency fund, which they claim is the country’s first of its type. Bob Buechner, a tax attorney in downtown Cincinnati, is the leader of a group that has launched the Cincinnati Swap Fund L.P., which allows cryptocurrency investors to exchange their coins for a share in the fund. Its goal is to give cryptocurrency investors, such as Bitcoin investors, a means to manage the tax consequences of their investment. This allows investors to stay tax compliant while also allowing them to diversify their investments as Buechner explained.
They said that they believe this will be highly appealing to investors. When the cryptocurrency market heats up, savvy investors know what they can do. He thinks it is the only fund of its kind in the country that allows investors to diversify their assets and invest in cryptocurrencies tax-free. The fund accepts bitcoin from investors and holds it until exchanging it for a share of the partnership, similar to a mutual fund. The fund also invests in a number of cryptocurrencies, as well as other types of assets including hedge funds. Buechner added that they have the flexibility to get out quickly if the market falls.
When investors wish to withdraw their funds, they can do it in the form of cryptocurrencies, dollars, or a combination of the two. The cryptocurrency they paid at the beginning may have appreciated in value, and the fund’s investments may have yielded profits. Investing profits would be taxed, but the original bitcoin investment would be exempt. He also said that a lot of people who make a lot of money in crypto have a lot of tax liabilities. Because the cryptocurrency market is typically volatile, investors must focus on diversification and risk management. Bitcoin, the most well-known cryptocurrency, was above $60,000 in April, then dropped below $40,000 in May, and is presently hovering just around $33,000. However, it is still twice as expensive as it was in mid-November.
Buechner explained that they are aiming to help folks with crypto investments be tax compliant and sleep well at night. The market is unpredictably volatile. It’s been hit and miss, but it’s on the rise in the long run. Traditional investors are also growing more accepting of cryptocurrency. Investment firms are launching funds dedicated to it. He stated that it’s gradually developing as another asset class. According to Buechner, the fund began last week with a $50,000 investment from him and a $25,000 commitment from the general partner that runs it.