Accredited investors in Canada looking for exposure to digital collectibles available on the blockchain should soon be able to buy a “Web3” investment product.
Accelerate Financial Technologies Inc. plans to launch the Accelerate Non-Fungible Token (NFT) Fund, which the Calgary-based firm says is the first Web3 investment vehicle in Canada.
Accelerate is currently raising capital from investors and finalizing the details of the fund, which is available only to accredited investors via private placement. The minimum investment is $50,000 and the fund will initially be capped at $42 million.
CEO Julian Klymochko said the fund is set to launch within a few months.
Through the fund, investors would own a diversified portfolio of “blue chip” NFTs, a type of cryptoasset that combines digital art with elements of blockchain and social networks. The fund’s holdings would include collections such as CryptoPunks and Bored Ape Yacht Club.
Accelerate said the fund could provide exposure to a booming market of more than $40 billion.
At this point, Accelerate is focused on individual, high-net-worth investors. The target market for the fund is accredited investors who express a “desire to participate in an exciting new asset class” and who have a suitable risk profile, Klymochko said.
He said he thinks it’s too early for institutional investors, who generally take longer to invest in new asset classes. He compares NFTs today to the state of Bitcoin in 2013, with “high upside potential.”
“This is up there in terms of some of the riskiest strategies, just because it’s brand new, incredibly volatile, and this asset class is mostly unproven,” Klymochko said.
Accelerate advises investors to put no more than 1% of their money in the fund.
Klymochko said NFTs may also provide diversification, as returns have so far been uncorrelated to other asset classes.