This is how a fund may operate
1. The Bitcoin Fund raises its funds from investors in return for a share of the scheme's profits.
2. The Fund would then buy up assets that would go up in value (like NFTs and cryptocurrency projects)
3. As time passes, the value of those assets should rise, increasing the value of the Fund's shares.
4. The Fund would then sell off the assets, giving the investors a return in the form of dividends while allowing the Fund to repeat the cycle.
This model is inspired by REITs (Real Estate investment trusts) which make their investors a return via dividends and capital growth.
It may be flawed due to the volatility of cryptocurrency projects and the relative difficulty of verifying whether a project is legit.
Maybe the Bitcoin Fund could be backed by something more trusted like a Bitcoin reserve or even gold in the event of major losses
like a project turning out to be a scam or the crypto market going into a fall in demand.
I don't know if you are unaware of it or what but we have a lot of Defi projects which work pretty much this way, but the only major difference is that there isn't any single fund manager which decides where to invest the whole fund instead it's based on a decentralized consensus. In fact, we have even better models now which focus on yield farming which means investing directly where there is most yield, therefore, ensuring maximum profits, however, the caveat in cryptocurrencies is the impermanent loss, you might gain double times the BTC, for eg. you might get 2 BTC after investing 1 but the problem is if the price of BTC falls thrice then the returns are pretty much useless. 1. The Bitcoin Fund raises its funds from investors in return for a share of the scheme's profits.
2. The Fund would then buy up assets that would go up in value (like NFTs and cryptocurrency projects)
3. As time passes, the value of those assets should rise, increasing the value of the Fund's shares.
4. The Fund would then sell off the assets, giving the investors a return in the form of dividends while allowing the Fund to repeat the cycle.
This model is inspired by REITs (Real Estate investment trusts) which make their investors a return via dividends and capital growth.
It may be flawed due to the volatility of cryptocurrency projects and the relative difficulty of verifying whether a project is legit.
Maybe the Bitcoin Fund could be backed by something more trusted like a Bitcoin reserve or even gold in the event of major losses
like a project turning out to be a scam or the crypto market going into a fall in demand.
