2018-10-16 00:57 |
The first three quarters of this year saw the launch of 90 cryptocurrency hedge funds, according to Crypto Fund Research. This number is surprising, as the crypto market has been quite bearish most of this year.
Gaining GroundHowever, it turns out that we may see a total of 120 crypto-related hedge funds for this year, or around 20 percent of the predicted 600 total hedge funds launching in 2018. Compared to last year, in which only 16 percent of launched funds involved cryptocurrency, this is a positive expansion. 2016 saw just 3 percent of crypto-related funds in comparison.
Nearly half of these funds were launched in the United States, but Australia, China, Malta, Switzerland, the Netherlands, and United Kingdom-based funds have appeared as well, as reported by News.Bitcoin.com.
However, while we are seeing growth in cryptocurrency hedge funds, these groups make up a small amount of the overall hedge fund industry. Right now, there are only 303 crypto funds, just 3 percent of the over 9,000 hedge funds that exist across the world. These funds only control around $4 billion worth of assets as well—much lower than traditional hedge funds which manage over $3 trillion. With that said, this number isn’t much of a surprise with cryptocurrencies being so new.
It must be mentioned that crypto venture capital and private equity funds aren’t added to this total. If counted, those additional groups make up a total of 622 cryptocurrency funds.
The founder of Crypto Fund Research, Joshua Gnaizda, shared his thoughts on the statistics:
“In the midst of 2018’s decline in traditional hedge fund launches, crypto hedge funds are a notable aberration. Cryptocurrency prices have been in a bear market for the better part of the year and regulatory uncertainty persists in much of the world.”
Gnaizda also reveals that, while the market isn’t in the best of places, hedge fund managers are anything but deterred.
“While we don’t believe the rate of new launches is sustainable longer-term, there are currently few signs of a significant slowdown,” says the founder.
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