Fairfax County Retirement Systems is getting into the “yield farming” business, despite recent developments in the crypto lending space.
This year’s crypto lending crisis shocked the industry. That hasn’t stopped Fairfax County Retirement Systems from digging deeper into the space. Fairfax County’s pension fund, worth $6.8 billion, has been given permission to invest $70 million in two crypto yield farm funds.
The news comes just one month after two retirement systems, the Fairfax County Employees Retirement System and the Fairfax County Police Officers Retirement System, made a $35 million investment in the Parataxis Digital Performance Fund. Capital and VanEck’s new financial income fund, respectively.
Agricultural market with high yields
The disastrous events of the last few months have reduced the value of crypto assets by more than 50%. However, Katherine Molnar, chief investment officer for the Fairfax County Police Officers Retirement System, reported that the fund’s original market investments have increased by 350%. According to the executive, “things will recover and the strongest technology will probably survive.”
Molnar was mentioned,
“Some of the returns you can achieve in a yield farming strategy are really attractive because some people have moved away from that space. For those who are still willing to provide liquidity, decent profit seekers, they can actually get more attractive returns right now.”
The administration The region’s foray into digital assets began three years ago, when the Virginia Police Department invested a portion of its pension fund in Bitcoin and blockchain technology. Its director, Jeff Weiler, has not been fazed by the high volatility of the market and has instead stated that all investments carry certain dangers, while stating that trading cryptocurrencies could generate significant profits.
The decline of crypto lending platforms
After the collapse of the Terra ecosystem algorithmic stablecoin, UST, and its sister token Luna, the crypto lending industry began to disintegrate (now Luna Classic). This episode ultimately exacerbated the advent of a “crypto winter,” resulting in an industry-wide sell-off followed by a series of bank-run-like withdrawals from platforms.
Three Arrows Capital, a multi-billion dollar hedge fund, was the first to fail, dragging many investors down with it. Shortly after, Voyager Digital filed for bankruptcy, preventing customers from recouping the investments they had made in the platform. Celsius is another crypto lender that has filed for bankruptcy.