Xapo Bank teams up with trading firm Hilbert Group to launch $200m Bitcoin fund

Hilbert Group has partnered with Xapo Bank to launch a Bitcoin-based hedge fund with an expected capital of over $200 million.

Quantitative investment firm Hilbert Group has announced a strategic partnership with cryptocurrency-friendly Xapo Bank to manage a new Bitcoin-based hedge fund.

The fund, which is set to go live in September, is expected to raise over $200 million in seed capital from Xapo Bank and other investors throughout 2024, the Stockholm-headquartered company said in a press release on August 27.

The idea behind the initiative is to provide companies, businesses, and professional investors with the opportunity to “earn BTC-denominated returns from institutional-level structured credit arrangements that are not directly available to market participants,” the press release said.

Xapo Bank director Joey Garcia described the fund as a “natural evolution of the asset class” as the company wants to offer the right products to participants who are looking to “not just gain exposure to the Bitcoin price, but also structured ways to grow Bitcoin value.”

The fund will charge lower fees than Hilbert’s other hedge funds, which typically operate on a “2% and 20%” fee structure. Hilbert Group CEO Niclas Sandström expressed optimism about the partnership, noting that the firm has developed a “close and strategic relationship” with Xapo Bank over the past 12 months, adding that both expect the fund to “grow significantly in the coming year.”

The latest initiative comes after Xapo Bank took a significant step towards becoming the first bank in the UK to offer interest-bearing Bitcoin (BTC) and fiat accounts after successfully extending its banking licence to operate in the country.