There is a bright future ahead in the world of cryptocurrency hedge funds. More and more of these ventures are launched every single fiscal quarter. As of right now, there are no less than 226 cryptocurrency hedge funds in existence. A rather spectacular number, although it will continue to increase for some time to come.
The global interest in cryptocurrencies has never been greater. Bitcoin’s price increase is the main catalyst fueling this interest. Hedge fund managers are also paying close attention to these developments. A fair few of them even create separate cryptocurrency hedge funds to get on board with this new form of money. New research by Autonomous Next shows there 226 of such operations active around the world. A solid number, but there’s always room for more.
The Rise of Cryptocurrency Hedge Funds
A lot of hedge funds now focus their attention on trading cryptocurrencies. While a volatile market, there is a lot of money to be made. This has led to the number of cryptocurrency hedge funds doubling in just four months. While the current record is still 226, that situation will look very different in a few months from now. Especially with most markets recovering lost value, the demand for exposure will only grow bigger.
Autonomous Next’s Lex Sokolin comments as follows:
“While the softer prices of crypto assets do create a more difficult environment for investors, I do not think it will pause the influx of funds and other financial institutions building products in the space…It would take the extreme case of the entire space contracting by 80 percent and high regulation before the flow of funds turns around.”
It is also important to note these cryptocurrency hedge funds net a healthy profit. Just last year, the average fund gained over 1,300% over a course of twelve months. This is offset by a smaller 4.6% loss during January of 2018. During that time, most markets lost a fair amount of volume during the yearly January Dip. It is evident things will turn around once again in the near future. Moreover, more clients also generate more passive revenue for these cryptocurrency hedge funds. Fees can be as high as 19% for management and performance for funds tracking.
Header image courtesy of Shutterstock