Crypto hedge fund Nickel Digital Asset Management cycled into a cash position following the crypto market collapse of May.

According to Bloomberg, the $200 million crypto hedge fund led by JPMorgan and Goldman Sachs alumni redeployed its capital in anticipation of another explosive price run for cryptocurrencies.

Prior to piling into a cash position, Nickel Digital focused on cryptocurrency arbitrage opportunities resulting from cryptocurrency price differences across the spots and derivatives markets.

Indeed, crypto arbitrage trading reportedly offered double-digit annualized gains for institutional investors with sufficient capital to make sizable returns on these momentary price gaps. These trades are market neutral rather than directional since the focus on price discrepancies and not price action.

Commenting on the fund’s investment thesis, Nickel Digital CEO Anatoly Crachilov told Bloomberg: “We don’t take directional bets, so whether Bitcoin goes up 300% or down 70%, we will seek to capture arbitrage opportunities from market dislocations,” adding:

“Our market-neutral, low volatility strategy is designed to provide positive returns irrespective of market directionality. It’s meant to make a transition into the crypto market easier for investors with lower risk tolerance.”

Nickel Digital has reportedly earned 29% in gains at 3.5% volatility, far lower than the 78% market average volatility for crypto assets. However, Bitcoin’s 

BTC

$21,519

 blow-off top back in April and the ensuing altcoin capitulation in May has reportedly upended these arbitrage opportunities for hedge funds like Nickel Digital.

Bitcoin’s 50% crash from its $64,000 all-time high triggered a cascade of liquidations in the futures market especially for over-leveraged longs to the tune of about $9 billion. Altcoins also crashed more than 70% and price action has remained in a sideways accumulation state with frequent 10 to 15% dips.

Related: ‘Bitcoin will go all the way to $160,000 this year,’ says Celsius CEO

For Crachilov, it is all about playing the waiting game, for now: “June will be remembered as a cash-rich, wait-and-see month.” The Nickel Digital CEO also stated that the current market downturn is not out of the ordinary for investors long in the crypto business.

The crypto hedge fund chief stated that institutional investors are starting to move away from seeing crypto investments as a reputational risk. Indeed, banks in the United States and Europe are beginning to offer direct exposure to Bitcoin for both retail and big-money players.

Back in June, Alex Mashinsky, CEO of crypto lending platform Celsius, told Cointelegraph that he sees Bitcoin reaching a new all-time high of $160,000 before the end of the year.