Net asset value of a crypto fund: what is the share worth when an exchange freezes withdrawals?

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This seventh installment of our series explains what’s behind this number. You will see how the net asset value of a crypto fund is calculated, why the price chosen for a bitcoin depends on a time and a source fixed in advance, what the fund can do with assets immobilized on a platform, and why this choice decides who, among the investors, bears the possible loss.

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The calculation itself is simple. We add up everything the fund owns (cryptos, stablecoins, positions on derivatives, cash in the bank), we remove everything it owes (accrued management fees, provisioned performance commission, invoices from service providers), and we divide this net amount by the number of shares in circulation.

Consider a fund that holds the equivalent of €10.4 million in assets and owes €200,000 in fees. His net assets are worth 10.2 million. If he issued 85,000 shares, each is worth 120 euros. A new investor who contributes 120,000 euros receives 1,000 shares, and a holder who returns 1,000 receives the same amount, possible exit costs aside.

Two points must be remembered. The first: the performance commission is provisioned in the NAV over time, even before being taken. The published price is therefore net of fees already acquired by the manager, with the high water mark mechanism described in our fifth part. The second: the calculation does not fall to the manager. In a well-organized fund, it is an independent administrator who reconciles the balances of platforms, banks and wallets, applies the valuation rules and finalizes the figure.

The frequency varies from one fund to another: daily, weekly or monthly. It also sets the pace of entries and exits, since you can only subscribe or redeem on a date when a NAV is calculated.

A CAC 40 share has an official closing price. A bitcoin does not have one. It is traded continuously, seven days a week, on dozens of platforms, and its price differs slightly from one to another. To value a portfolio, you must therefore choose a reading time (the cut-off, often midnight UTC) and a source: the price of a given platform, an average of several platforms, or an index published by a specialized supplier.

Machine-translated from French