In a space filled with venture investors and traders, a blockchain fund run by value managers thinks it can give investors greater returns than bitcoin itself.

Bitcoin has been called the best performing asset of the decade by some. Off the Chain Capital, a fund that deploys a traditional value investing strategy – using fundamental analysis to find undervalued assets – says its fund has outperformed bitcoin in each of the last five years.

The fund has averaged 133% per year since its inception in 2016, compared to about 108% per year on average for bitcoin, according to Off the Chain. The firm used the compound annual growth rate for both the fund and bitcoin using a beginning date of Dec. 31, 2016 and ending Feb. 28, 2022.

“We’ve outperformed bitcoin five out of five years, and we’ve done it with 80% less volatility than bitcoin,” said Brian Estes, the fund’s CEO and chief investment officer. “That’s what I’m really proud of, because I built this so endowments, foundations and other conservative investors could gain exposure to blockchain assets and get that downside protection.”

It also said it has outperformed the S&P 500 by 3,653% in the same period, and is 99.99% uncorrelated to the broad market index, meaning the two do not move up and down in tandem.

The fund’s strategy is to find mispriced assets in the blockchain space.

It aims to buy one dollar’s worth of blockchain assets for 50 cents and make returns on the purchase of the assets, rather than buying them at fair market value and letting them rise. This way it can apply a value approach while capturing the growth of the still-young industry.

For example, Off the Chain was a big buyer of shares of Mike Novogratz’s Galaxy Digital two years ago, which went for about 70 cents then, Estes said. The stock closed Tuesday at $15.79 a share.

Silvergate Bank is another company being mispriced, according to Estes. The crypto-friendly bank went public two years ago and was valued as a bank, when it operates like a crypto company.

“It was being valued at eight times earnings, and three times book value and what people didn’t understand is that Silvergate is not a bank, it’s a crypto company that basically has a monopoly on most of the crypto companies.”

As a result, its earnings are growing at more than 100% a year, he added.

Private equity accounts for about half of the portfolio. The firm also looks for mispriced digital assets, including bitcoin.

Off the Chain is one of the largest buyers of Mt. Gox bankruptcy claims. Mt. Gox was once the largest custodian of bitcoin until a Russian hacker stole nearly all of it — about 740,000 bitcoins then worth $460 million.

The fund buys those claims from people at an average discount of about 80%, Estes said.

“It is our view that bitcoin is the winner of the store of value and is a major diversification instrument for portfolio allocators. If you can’t outperform bitcoin as a fund, you might as well just own bitcoin and not pay fees to manage,” Purcell said.

It also sees both Binance and its utility token, BNB, as undervalued assets.

“It is currently valued the same as Coinbase, but it trades about 4.2 times the volume of Coinbase,” Purcell said of the exchange. “They’ve also developed the Binance Smart Chain, which is taking developers away from other communities such as Ethereum, and we believe that is a value play.”

The fund currently has about 200 limited partners and $399 million under management. It mainly targets institutions, endowments, family offices and other high net worth individuals for about a $1 million minimum.

Estes said the fund currently has capacity for another $200 million to come into the fund. It’s also “very likely to be opening a bitcoin artificial intelligent algorithmic trading fund over the next six months.”