New York-based hedge fund Fir Tree Partners is launching a new fund focused on distressed crypto assets, an attempt to cash in on the intense turmoil the industry has experienced over the past year or so.
The Fir Tree Digital Asset Opportunities Fund will launch on August 1, according to an email seen by CoinDesk.
“Fir Tree is at its best when we identify wrong, dislocated or complex opportunities. We rarely face all three scenarios, but that’s what we’re seeing now with digital assets,” Fir Tree wrote.
Fir Tree did not immediately return requests for comment.
Last year was a banner year for crypto crashes and bankruptcies, including the lending businesses of Three Arrows Capital, Voyager Digital, BlockFi, Celsius, FTX, and Genesis (which, like CoinDesk, is owned by Digital Currency Group).
In its email, Fir Tree pointed out that it “does not have a view on the direction of cryptocurrency or the reflection of any coins” and will try to “prevent any crypto exposure”.
Fir Tree also said traditional crypto investors lack the experience to navigate “bankruptcy proceedings (or) to (conduct) effective activist efforts,” giving Fir Tree an advantage. Fir Tree said they would struggle to “get up to speed in this very complex asset class” and did not want to be associated with the name “crypto”.
Update (July 14, 2023, 18:52 UTC): Adding the last two paragraphs with more information from the Fir Tree document.