How does a crypto fund work? From investment to exit

How does a crypto fund work? From investment to exit

Investors who want exposure to crypto without buying and storing coins themselves soon come across the crypto fund. On paper the idea is simple: several investors pool their money and a manager invests it according to a fixed strategy. In practice more parties are involved than many investors realise. That division of roles helps you judge how responsibilities are split, which risks are limited and where the main points of attention lie. This article follows the path of your investment, from the first deposit to the moment you exit. We use the Callisto Capital fund as the example; the terms themselves are on the fund page.

Investing together in one portfolio

A crypto fund is a collective investment. Each participant contributes money to a shared pool of assets. The manager uses that pool to buy and sell cryptocurrencies such as Bitcoin and Ethereum, following rules agreed in advance. You do not decide on each transaction; you choose a strategy and a manager once.

That is the essential difference from buying crypto yourself. A self-directed investor chooses a trading platform, manages wallets and keys, and decides when to buy and sell. In a fund, that work lies with the manager. The trade-off is that you give up control over individual transactions. Which route suits you is discussed in investing in a crypto fund or buying crypto yourself.

You buy a participation, not coins

An investor in a fund does not own any coins. What you hold is a participation in the fund, often called a fund unit in English. The rights attached to it, including your economic interest in the fund’s value and results in proportion to your investment, are set out in the fund terms. You do not directly own individual coins held by the fund. If the value of what the fund owns rises, your participation rises with it. If it falls, your participation falls as well.

In the Netherlands, a crypto fund usually takes the form of a fund for joint account, known by its Dutch abbreviation FGR. It is not a company but an agreement between the manager, the party that holds the assets legally, and the participants. How that structure works in detail is the subject of our article on the fund for joint account.

This also affects how you invest. You deposit euros, not crypto. Existing coins cannot be transferred into the Callisto Capital fund directly: anyone holding crypto sells it first and transfers the proceeds to the fund’s bank account. Before that, every new participant completes a mandatory customer due diligence (CDD) check under the anti-money-laundering rules.

Four parties, each with its own task

A well-structured fund deliberately places its key tasks with separate parties. Such a separation of roles can limit certain risks, such as dependence on a single organisation. It does not guarantee flawless execution or a safe investment.

• The manager runs the strategy and takes the investment decisions. At Callisto Capital this is done systematically and on a trend-following basis: by rules, not by feel. What that difference means is explained in systematic versus discretionary.
• The foundation (stichting) is the legal owner of the fund’s assets. This keeps the fund’s assets separate from those of the manager. Should the manager run into financial difficulty, the fund’s assets in principle do not form part of the manager’s estate.
• The custody provider holds the cryptocurrencies; for Callisto Capital that is Amdax. Why professional custody matters for larger amounts is covered in storing crypto safely.
• The administrator keeps the books as an independent party, calculates the fund’s value, processes the transactions and keeps the fund’s records. For the Callisto Capital fund that is AssetCare.

This separation is no formality. When assessing a fund, it pays to ask for each of these four tasks who performs it and whether that party is independent of the manager.

The net asset value (NAV): set monthly

The market value of cryptocurrencies changes constantly, but the value of a participation is set periodically. To do so, the administrator calculates the net asset value (NAV): the value of all assets minus liabilities, divided by the number of participations. At Callisto Capital this happens once a month, at the start of the month. The economic value of the underlying investments keeps changing between those valuation dates.

Subscriptions, additional investments and redemptions take place at that value, and your statements are based on it too; the exact dates, deadlines and costs are set out in the fund terms. Participants follow their position through the investor portal, which the administrator runs. It also helps at tax time: instead of balances per wallet and per platform, you have one value per reference date.

Subscriptions and redemptions at fixed moments

Because valuation is monthly, access follows a fixed rhythm as well. At Callisto Capital you can subscribe once a month at the NAV, from 100,000 euros. Additional investments are possible from 25,000 euros.

Redemptions follow the same calendar. The fund buys back participations as of the first day of the new month, and the request must be received at least five business days before that date. A partial redemption is at least 10,000 euros, and the remaining holding may not fall below 100,000 euros. So you cannot subscribe or redeem at any moment you choose. This can be a limitation if you need access to your money at short notice, so make sure the terms fit your liquidity needs.

What it costs

A fund charges differently from a trading platform. You do not pay a separate fee for each trade. Instead, the fund charges a management fee based on assets and a performance fee based on results. At Callisto Capital there are two. The management fee is 2 percent per year, settled monthly at the NAV. In addition there is a performance fee which, since 1 August 2026, is tiered by each participant’s total investment; the percentages are set out in tiered performance fee.

That performance fee works with a high-water mark: according to the information memorandum, the highest NAV reached in the past. The fee is tracked per participant and charged only on gains above that highest NAV. If the fund falls, that loss must be recovered before a performance fee is charged again. This is intended to prevent a performance fee from being charged again on the recovery of an earlier loss; the information memorandum sets out exactly how the high-water mark is calculated. The fund also bears its own administration costs, and anyone redeeming pays a 1 percent exit fee, which benefits the participants who remain.

Registration and supervision

A fund like this may operate in the Netherlands under a registration regime, provided the manager stays within the limits of article 2:66a of the Dutch Financial Supervision Act (Wft). The total assets under management across the investment funds the manager manages may then in principle not exceed 100 million euros. Under additional conditions the limit is 500 million euros, namely where no leverage is used and participants cannot request redemption during the first five years.

In addition, the offering must meet one of the conditions in that article. Participations are offered, for example, to fewer than 150 persons, or can only be acquired for at least 100,000 euros per participant. If a fund is offered exclusively to professional investors, these offering conditions do not apply; the limits on assets under management still do. The 100,000 euro minimum is therefore not a general rule for every fund under this regime but one of the legal routes; Callisto Capital applies that amount as its minimum.

A manager that meets these legal conditions is exempt from the AIFMD licence requirement and must register with the AFM. It is not supervised in the way a licensed manager is. Legal obligations still apply, including the registration conditions and periodic reporting on, among other things, its main investments and risks. Nor does registration mean that the AFM has approved the fund or its expected return. How this regime relates to the EU Markets in Crypto-Assets Regulation (MiCA) is explained in MiCA versus AIFMD-light.

If you still have questions, the most common ones are answered on our FAQ page. If you would rather talk it through, we would be glad to welcome you at our office. In an introductory meeting we walk through the steps in this article for our own fund: the parties involved, the valuation, the costs and the terms for subscribing and redeeming. You can arrange a meeting via contact.

Callisto Capital manages a crypto fund for high-net-worth individuals and entrepreneurs. The manager is registered with the Dutch Authority for the Financial Markets (AFM) under the AIFMD-light regime and is not subject to ongoing supervision by the AFM. This article provides general information only and does not constitute investment or tax advice.