Fairfax County continues its bitcoin investing efforts via the VanEck crypto lending fund, exploring the world of yield farming via its asset manager.
Fairfax County, Virginia has begun investing a portion of a $35 million allocation in a bitcoin loan fund run by VanEck.
The company stated that it has received the inaugural investment commitment tranche from Fairfax County, which is allocating funds from two retirement systems to a variety of cryptocurrency-focused investment opportunities.
Fairfax County had already alluded to entering the field of Decentralized Finance (Defi) yield farming as part of its progressive stance on the cryptocurrency industry. Beginning in 2018, the county began investing a small percentage of its Employees’ Retirement System and Police Officers’ Retirement funds in various cryptocurrency startups and enterprises.
Fairfax’s entrance into the realm of DeFi has officially commenced with its investment in VanEck’s New Finance Income Fund, as it continues to diversify its cryptocurrency investment strategy. The fund provides bitcoin companies, platforms, and businesses with short-term loans.
According to the VanEck website, the fund lends stablecoins and fiat dollars to cryptocurrency borrowers. The fund offers high-yield income exposure to cryptocurrencies to accredited investors and requires an initial commitment of $1 million. A simpler strategy that reduces the operational cost of direct digital asset lending is touted by the investment manager.
Fairfax County has gradually boosted its investment in the bitcoin industry by allocating cash to seven cryptocurrency-focused allocations. A hedge fund intends to capitalise on yield farming, basis trading, and exchange arbitrage opportunities in one of these allocations, which aims to profit from volatility in the sector.
Employees’ and Police Retirement Systems invested $10 million and $11 million, respectively, in Morgan Creek’s Blockchain Opportunities Fund, as reported by the County in a prior update on its investments in the bitcoin and blockchain space.
As the county evaluates the investment potential of the alternative asset class, the capital allocation from both funds represents less than 1 percent of their total assets under management.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.