Last July at Bitcoin 2024, Samara Alpha Management and Bitcoin Magazine Pro selected Boreal, a market-neutral DeFi hedge fund, as the winner of this year’s Bitcoin Alpha competition.
Boreal received $1 million in seed capital and access to Samara’s institutional-level infrastructure to help manage the funds.
Boreal stands out due to its trading strategy that leverages various DeFi protocols to generate returns based on the US Dollar, Bitcoin, and Ethereum.
“There are always ways to make money in DeFi, even when things are going very poorly,” said Boreal founder Evan Morris, who has been in the cryptocurrency industry since 2016 and previously worked in traditional finance.
“I started managing external funds in this space four years ago with two friends and later joined a larger firm as a portfolio manager and ran DeFi strategies for several years. We recently launched Boreal and now, with Samara’s help, we can take the next step,” he added.
Adil Abdulali, Chief Investment Officer at Samara Asset Management and one of the competition judges, explained why Samara chose to partner with Boreal.
“Evan is someone with a very good track record and the right risk framework for this type of strategy,” he said. “He has the trading maturity and because crypto is such a young market, it’s rare to find someone with years of experience in DeFi.”
Abdulali also shared details about Samara’s plans to support Morris.
“If there is a way we can get him up and running quickly with all the infrastructure — management, auditing, accounting, subscription documents, bank accounts, BitGo accounts, etc. — let’s do it.” he said
Bitcoin’s DeFi
Morris sees Bitcoin playing a much larger role in the DeFi space in the future.
“Bitcoin’s arrival on the DeFi scene allows us to do the same things we have been able to do with stablecoins over the past few years,” he said.
“DeFi 1.0 was based on USDC and Tether, but the future of DeFi will include various types of wrapped Bitcoin and Bitcoin derivatives. And we are pleased to provide liquidity.”
Abdulali also believes Bitcoin will play a larger role in DeFi, and his company is well-positioned to help Boreal capitalize on this.
“Bitcoin is not like all other coins. “It’s one of the best collaterals,” he said.
“We are using Bitcoin in a Bitcoin-denominated fund that we launched a little over a year ago, which uses essentially the same type of strategy as the dollar-denominated market-neutral fund. However, the fund trades entirely in Bitcoin,” he added.
“The idea is to use Bitcoin on new DeFi protocols like Babylon in market-making strategies instead of putting collateral like USDC or USDT on exchanges.”
The future of DeFi
Morris explained that DeFi is much more advanced than it was four years ago when it first emerged into the cryptocurrency space.
“There are so many tools out there to get alerts on smart contracts and assess smart contract security,” he said.
“Cybersecurity and wallet technology have also become much better. This makes institutional-grade DeFi products possible,” he added.
And Abdulali would like to see Boreal leverage institutional-grade DeFi before the institutions arrive.
“All this new institutional capital is not going to impact DeFi for some time,” Abdulali explained. “They have barely entered Bitcoin, so it will be a long time before the DeFi environment is saturated and there is too much capital,” he added.
“There could be interesting returns for some of us who are willing to play in space now.”
Source: Bitcoin Magazine