As the first bitcoin hedge fund to receive a license from Dubai’s Virtual Assets Regulatory Authority (VARA), Nine Blocks Capital Management is taking pride in this fact.Additionally, the hedge fund said on Monday that Dubai will become its global headquarters.Due to a thorough set of regulations covering everything from advertising to issuance and exchange services, a thriving community of cryptocurrency firms has established itself in Dubai, seemingly a world apart from the obscurity and unpredictability of U.S. regulations.
“I think what’s interesting is that VARA has really created an ecosystem for crypto in Dubai,” Nine Blocks co-founder Henri Arslanian said in an interview. “Many of our hedge fund’s counterparties are one minute walk away from my office. Everybody is in this one square kilometer, which makes it easy to meet up, have conversations and generally enables a good exchange of information.”
Nine Blocks trades in the crypto industry using a market-neutral approach, taking advantage of arbitrage possibilities and market inefficiencies.
“Being market neutral, we don’t take any directional risk, so whether bitcoin is going up or going to go down doesn’t matter much to us,” Arslanian said. “We generate alpha from the inefficiencies in crypto markets. So, we will arbitrage between perpetual swaps and the spot price of bitcoin and ETH, for example.”