Cryptocurrency Hedge Funds Seek ICO-Like Returns From Stablecoin Investments

Cryptocurrency hedge funds remain optimistic about the prospects of making massive gains in the digital asset markets, despite falling prices and negative investor sentiment over the asset class.

Their bets? Leading investments alongside huge players in "Equity-like" offerings; which have seemingly created great interest among traditional investors.

For the uninitiated, the equity-like tokens are pegged to an underlying stablecoin as the latter's usage increases.

Stablecoins themselves have become one of the most-anticipated products in the cryptocurrency market, with uses ranging from exchanging value across borders without fears of volatility and conducting complex trading strategies in crypto-markets.

"Investors in the equity-like tokens associated with a stable utility token are seeing that historical growth in Tether and thinking that if they can get even a portion of that, then obviously you'll generate tremendous returns. That's leading to a lot of the hype and lots of different competitors coming out right now."

Kling notes gains of up to 46 times are possible if the right investments are made, and the underlying stablecoin becomes widely-used.

Examples of such projects include MakerDAO, Basis, Havven, and Reserve; with all having a leading digital asset for investments and an associated stablecoin for trading and store-of-value purposes.

The project leverages token supply using algorithmically using three tokens: one a stablecoin, second a "Bond" token that is auctioned when amount needs to be contracted, and finally a share-token that pays dividends to investors as demand grows.

Few are raising questions about how a stablecoin and its equity-token would respond to a drop in prices or a market downturn.

Presently, there are dozens of stablecoins on the market, with a dozen more in the works.