Two Prime Embraces Crypto Trend-Following Strategy

The SEC-accredited crypto investment manager is betting crypto markets will recover — even if it doesn’t time the bottom


Dragos Asaftei / modified by Blockworks


Two Prime is placing a bet on its ability to derive alpha by following sector trends as markets roil, via the formation of the digital assets investment manager’s latest vehicle.

Two Prime, which runs crypto strategies for accredited investors, kicked off trading for its trend-following product with proprietary capital within the last month, according to a source familiar with the matter and marketing materials obtained by Blockworks. 

The strategy of the emerging fund, Trend Alpha Crypto 100, is an eponymous one, according to its marketing materials. Its intention is to “act as a liquid venture capital fund for altcoins” via a long-only approach that looks to snap up bargains out of a broad basket of distressed crypto assets, by way of its underlying algorithms. 

The vehicle, like most trend-following plays, is designed to move into cash when markets move against its long only mandate. 

Two Prime Chief Investment Officer Nathan Cox confirmed the fund’s formation in an interview. Cox declined to comment on specific details, including his firm’s marketing efforts, citing private placement regulations. 

A number of cryptocurrency-focused asset managers in the wake of the industry’s disastrous fourth quarter have turned to trying to capture trends, touting their own version of Wall Street’s long time retort to chaotic markets: Catch the next upside, and move into the safe haven of cash before whatever collapse is coming.

“It’s not a revelation in terms of what fund managers are trying to do here,” Cox said. “We have put our own spin on the trend.” 

Two Prime for its Trend Alpha Crypto 100 “really started with this idea that altcoins have been an alpha generator for crypto investors, obviously, since the beginning,” according to Cox.

“They provide an asymmetric return for a lot of investors — [like venture capitalists who] typically do not have the liquidity that they want,” Cox said. “We saw an opportunity for us to fill a void.” 

Cox has chosen an equal-weighted rebalancing mechanism, as opposed to organizing assets by their market capitalization.

“It wasn’t a difficult choice for us,” he said. “Risk premia is generally more asymmetric, let’s say, at the bottom 50 [tokens] — if you want to take this [venture] mentality to crypto and apply a fund filter.” 

Two Prime’s latest venture marks the firm’s first foray into a strategy that doesn’t trade derivatives. Macro factors, including interest rates and jobs data, are propelling the launch’s timing as risk-on assets are reentering the financial limelight. 

The vehicle, according to its marketing materials, imposes fees of 2% and 20%, which are still steep by digital asset standards. It imposes a minimum investment of $1 million and has a self-imposed initial capacity of $120 million. 

“The timing is critical,” Cox said. “Not to say we’re successfully going to call the bottom, but it certainly seems right now that the majority of risk is behind us — especially in terms of FTX.”

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg


In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.


BUZZ holds shares of Coinbase, Robinhood and MicroStrategy


Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile


The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally


While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders


Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume


DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit