BitMex’s Former CEO Arthur Hayes Reveals Secret To Crypto Fund Success

Key Points:

• Arthur Hayes and Akshat Vaidya founded Maelstrom Capital and are targeting infrastructure companies to beat bitcoin and ether’s returns.
• Good firms are founded in the bear market, and Maelstrom is “patient” in identifying quality projects.
• Investing in infrastructure projects is advantageous because they aren’t in the crosshairs of regulators to the extent that others might be.

Arthur Hayes and Akshat Vaidya founded Maelstrom Capital to beat bitcoin and ether’s returns. Maelstrom is taking things slow, targeting infrastructure companies because “it makes sense in this part of the cycle.”

Arthur Hayes’ family office uses his crypto, so there’s no rush to deploy capital to earn management fees, allowing the firm to be patient. The goal is to identify quality projects instead of spraying investments everywhere. Maelstrom is investing in infrastructure deals with technological moats and addressing a large market. These deals are simple to understand businesses. The projects that Maelstrom invests in now will likely come to a turning point around 2024, when the market starts to question whether these projects have fulfilled their promises, built their products, acquired clients, and demonstrated that their technology works.

Arthur Hayes thinks that clone projects will come, just like what happened in the COVID-19 bull market of 2020-2021, when clones of Uniswap, Compound, and Aave became flush with capital. Maelstrom’s goal is to have done the work during the bear market to identify which companies are genuinely valuable and which are just imitations. Maelstrom is willing to invest in a complete piece of [dog excrement] because that’s how crypto-tier returns are made when the market shifts from bear to bull.

Maelstrom is investing in infrastructure projects, especially at this cycle, because many of those aren’t in the crosshairs of regulators to the extent that others might be. For example, EtherFi, a decentralized and non-custodial liquid staking platform, which closed a $5 million round in February, will never get a Wells Notice. All of Maelstrom’s portfolio companies, except one which doesn’t have a token model, have been outside of the U.S. Even when a project does involve U.S. founders, it is domiciled in a friendly jurisdiction like Switzerland.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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