About Target Coin
Target Coin is a long/short fund designed to generate risk adjusted returns on price rise and price fall in the cryptocurrencies market. It introduces a new innovative business model of a hedge funds making money on cryptocurrencies market, using the blockchain. TargetCoin aims to be a leading Long/Short Crypto Fund with approximately $50 Million of Assets Under Management by 2018 and $500 Million of Assets Under Management by 2019.
TargetCoin is a closed-end fund (CEF). In the blockchain field, this would mean that the fund raises a fixed amount of capital through an initial coin offering (ICO), and the fund is then structured, listed and traded as a token. Usually, the tokens (or shares in a normal case) would be offered as a sale in a market. In the case of TargetCoin, it will be open to investments only during the different rounds of ICOs.
TargetCoin issues tokens built on a profit-sharing smart contract. This smart contract is designed to share 85% of the quarterly profits with the investors by buying back tokens and allowing the token value to increase, all with full transparency. In the event of quarterly loss, the smart contract will remain inactive.
TargetCoin takes the remaining 15% of the profit. This is radically different from the fee structure of usual hedge funds, which get paid on the assets even when they are losing. With this new fee structure, it is really attractive to the funds to make as much profit as possible.
It is undeniably a good thing for a capital provider to the funds, but it also has a drawback in that the fund managers are encouraged to take as much risk as possible, in order to make money.
TargetCoin is planning to share the profits with the investors in the token, which they claim to be a different approach than other cryptocurrency tokens. Indeed, other companies are not sharing their profits, but the issuers rely on token price rising as the company increases its profits. Moreover, sharing profits is essential to the funds business.
TargetCoin’s strategy is a classic long/short strategy on the cryptocurrencies market. It consists of taking long positions on cryptocurrencies that are expected to appreciate and short positions on cryptocurrencies that are expected to decline. A long/short strategy seeks to minimize market exposure while profiting from gains in the long positions and price declines in the short positions. Moreover, TargetCoin plans to diversify the risk over a number of different coins.
Although this may not always be the case, this strategy would be profitable on a net basis as long as the long positions generate more profit than the short positions. That is why TargetCoin plans to use technical analysis and other algorithmic indicators to switch between long and short positions. This is the most important part of the strategy.
10% of the ICO money will be used for the operations of the fund and 90% of the fund will be used to build a portfolio.
TargetCoin plans to issue 2 billion coins. 1.34 billion coins are available to the public, 260 million coins are held by the management team, and 400 million coins are held by the pre-ICO investors. During the ICO, the TargetCoin price will be ETH 0.000133.
Operations will begin on 10th September.
About its investment method:
TargetCoin is aware that it will be working in a volatile and young market. The company is planning to perform a fundamental analysis of different cryptocurrencies, along with an analysis of historical price patterns and a technical analysis to predict future market behavior. The company plans to keep some reserves in USDT to hedge the market risk in a bear crypto market.
In order to succeed in its long/short strategy, TargetCoin needs a robust technology capable of technical analysis.
According to the whitepaper and to Themerkle, TargetCoin is currently building a platform call Target X – a machine learning program which will provide real time market information to investors along with briefings, signals, and articles. All of this information will be analyzed by both the team and their machine learning program to identify historical trends and build predictive models for current and future market behavior.
But in fact, we have no information on whether this technology already exists or works. The whitepaper doesn’t give any information about how they have built this technology.
In a market as volatile as cryptocurrencies, it seems unrealistic to hope to make a profit and beat the market with such a strategy. For the stock market, studies in behavioral finance have found that almost no manager has beaten the market in 15 years. So long as TargetCoin hasn’t shown any real performance, it seems difficult to believe they have found the way to beat the cryptocurrencies market.
According to its whitepaper, the TargetCoin team combined over 6 years professional money management experience in the traditional financial markets.
Founders & Management:
Akshath Naik: Co-founder, Chairman, and CEO. Naik has a Bachelors degree in Accounting and Finance from the University of Mumbai. He is also currently the manager of one other Hedge fund: Alexandrite Capital (no information can be found about it). He also has some experience in stock trading.
Rohan Rathod: Co-founder and CTO. Rathod is also the CTO of Alexandrite Capital. He has a B.Tech in Computer Science from the Indian Institute of Technology of Bombay.
Prakhar Ahlawat: COO. Ahlawat is expecting to have his Bachelor of Commerce in Accounting and Finance from the University of Mumbai and a Bachelors in Engineering in Computer Science from Rajiv Gandhi Institute Of Technology in 2017.
It seems that the team has no significant experience hedge fund management.
The other Linkedin links given on the website do not lead anywhere.
|Technical White Paper||The TGTCoin whitepaper is too focused on the business development, and doesn’t speak enough about the technology, and not clearly. We may doubt the technology is currently working.|
|Team||The team is inexperienced, and some Linkedin links do not work.|
|Blockchain||Ethereum, smart contracts|
|Token as Asset||Shares|
*Disclosure – At the time of writing, Cryptorated staff owned no TGTcoin tokens.