Ark36 came to Cyprus because it is the right place to set up our cryptocurrency investment fund, says Ulrik Lykke, founder of the crypto assets investment fund, who relocated to Cyprus to set up his fund. “It is the first fully licenced cryptocurrency fund in Cyprus,” he says proudly.
Bitcoin has demonstrated its ability to offer a 200-300 per cent return on investment. The risk is the potential loss of 50 per cent. That is a superb risk-to-return ratio, Lykke told the Cyprus Mail in an interview.
“And that’s why it belongs in your portfolio. Investments in crypto assets offer a higher degree of diversification to your portfolio while also giving you exposure to an asset class with a very attractive risk-to-reward profile. Year-to-date, Bitcoin alone vastly outperforms gold, the DAX, and the S&P 500.”
Cyprus offered significant advantages to the Danish fund managers. “In Denmark, there was difficulty in accepting cryptocurrencies, the regulator was uncertain about what kind of asset it could be classified as,” Lykke recalls. “In fact, the classification of cryptocurrencies as an asset is something regulators in Europe is focusing on at the moment”
In setting up the cryptocurrency focused investment fund in Cyprus, this issue has been addressed by the regulator which authorises investment in cryptocurrencies for registered funds.
“Cyprus also provides the professional services network that we require to support our business,” Lykke adds. “Cyprus offer a great private sector with the necessary consulting firms, accounting firms and law firms of quite a significant size. I believe the level of service providers in Cyprus are better than those found in Malta. And we can work entirely in English.”
“The legal structure we wanted was that of an alternative investment fund, because we wanted to be a licenced entity: Bitcoin is a new area for investment, and we wanted to assure our investors for accountability and stability. The Cyprus Alternative Investment Fund structure gave us the broad scope of availability in terms of investment objects,” Lykke explains.
“If you are building something that is not physically rooted, Cyprus is an excellent location,” Lykke says. “I know many international businesspeople who are working virtually, and they agree that Cyprus has everything they need. In the digital times we live in, we are very able to market right across the European Union, and even to the rest of the world working from Cyprus.”
“We are dealing with an asset class that you could almost call ‘sexy,’ but investing in bitcoin needs to be better understood,” Lykke points out.
“Many of the risks that has been associated with investing and trading in cryptocurrency has been ironed out and investors now have many options to how they want to enter the market based on specific risk appetite” Lykke says.
“If investors are very risk tolerant, there are assets within the domain that potentialle offer even better potential returns than Bitcoin, but these, of course also comes at a much greater risk” Lykke adds.
“Bitcoin is really one of a kind, however. It’s like comparing gold with stainless steel when you compare it with other types of crypto. It’s the most decentralised of all the projects. It has the best distribution of wealth in the system. There’s not a single entity that has a huge allocation – the greatest is about 0.5 per cent, a fraction of what is seen at other projects,” Lykke maintains.
“The only thing bitcoin lacks is the ‘smart contract’ option, created by Ethereum. But the result is that bitcoin is more stable than all the other coins – its network has an uptime of 99.9 per cent, and that is virtually unequalled.”
“But there are still many hurdles and risks associated with dealing with these, so investors need advice from those who understand the market – which is where experts like ARK36 come in. Just as investors have always trusted their money and asset to professional investment firms, it makes sense to outsource the effort require to follow the market assiduously and to react to market movements in a timely manner.”
