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.”

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.


Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2023

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

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 Vertex.jpg


The proliferation of new perp DEXs has led to fragmented liquidity across various DEXs and chains. Vertex, known for its vertically-integrated DEX that includes spot, perpetual, and integrated money markets, is now tackling cross-chain liquidity fragmentation through horizontal integration with the launch of new Edge instances. Vertex's integrated offerings and cross-margined account structure amplify the benefits of new instances: native cross-chain spot trading, optimized cross-chain basis trading, consistent interest rates, reduced bridging friction, and more.


Plus, a dive into crypto’s ever-expanding unicorn club


Also, tokenization continues to grab headlines and one bitcoin miner stock soars Tuesday after inking a big deal


Fifteen million daily failed transactions disappeared from Solana


FTX debtors will pay the IRS $200M, with an outstanding lower priority claim of $685M


I’ve come to the realization that more attention is needed to create and sculpt the digital spaces where we live


The NYSE went down yesterday after a glitch caused a string of erroneous trades. Does DeFi fix this?