Frequently Asked Questions

Common questions and misconceptions about digital asset investing

Magnet Capital FAQs

Who can invest with Magnet Capital?

Magnet Capital is open to investment from wholesale investors only, the minimum initial investment size ranges from $25k-$50k depending on your chosen fund.

Generally, you are eligible as a wholesale investor if;

  • You have net assets of at least A$2.5m
  • You have gross income during the last 2 financial years of at least A$250,000
  • You control gross assets of at least A$10m
  • You intend to invest >A$500k in a single offer

What is Magnet Capital's investment horizon?

Digital assets are a new and rapidly evolving investment class which results in significant price volatility in the short term.

As such, Magnet recommends investments with a minimum timeframe of 5 years.

What does Magnet Trust 1.0 invest in?

Magnet Trust 1.0 has a broad mandate to invest across the digital asset ecosystem. This includes blockchain tokens, smart contract protocols, DAOs and NFTs.

Magnet Trust 1.0 does not invest in traditional asset classes such as equities (including crypto focused companies), commodities, real estate and bonds.

How does Magnet Capital ensure its investments are secure?

Magnet Capital employs market best practice security measures to secure its digital asset holdings, including offline 'cold' wallets for asset custody and multi-signature technology 

What is your fee structure?

Magnet Trust 1.0

  • Management Fee: 2.0% annually
  • Performance Fee: 20% of the increase in net asset value (inc. distributions) above the high watermark

Foundation and Voyager

  • Management Fee: 1.50% annually

Where is Magnet Capital domiciled

Magnet Capital is headquartered in Sydney, Australia.

All Magnet Capital Trusts are domiciled in Australia.

How does Magnet Capital report to investors?

Magnet Capital reports performance on a monthly basis for all of its funds.

In addition, Magnet also provides monthly insight pieces and a weekly newsletter.

Common Misconceptions

Cryptocurrencies are predominantly used for illegal purposes

All currencies (including traditional fiat currencies), are utilised by some bad actors for illicit purposes. 

However, cryptocurrencies are in fact broadly unsuitable for such activities, as the blockchain creates a permanent record of transactions which gives authorities an invaluable means to track criminal behaviour. 

Based on analysis by blockchain analysis firm Chainalysis, less than 0.15% of all cryptocurrency transactions in 2021 were for illicit purposes.

Digital assets don't have real world uses

Digital assets have a broad range of real world use cases, as evidenced by the growing number of protocols generating significant user derived revenues.

Examples include GMX (derivatives trading revenue), Ethereum (fees paid for execution of smart contracts) and AAVE (earn interest on, and borrow against digital assets) 

Cryptocurrencies are too complex for the average user

Cryptocurrency usage is seeing rapid take-up with an estimated 300m people worldwide now connected to the digital asset ecosystem.

Cryptocurrencies are unregulated

While regulation is an ongoing process, Australian authorities are actively engaged.

In October 2021, the Australian Government released a report, laying out a roadmap for the implementation of, among other recommendations;

  • A token mapping exercise to characterise the various types of digital assets available in Australia
  • Clarified Anti-Money Laundering and Counter-Terrorism Financing regulations, as they relate to digital assets
  • A revised Capital Gains Tax regime so that digital asset transactions only create a CGT event when they genuinely result in a clearly definable capital gain or loss
  • A policy review from Treasury to determine the viability of a Central Bank digital currency in Australia

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