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Alternative Market Briefing

20% of hedge funds launched in 2018 are crypto-focused

Thursday, October 11, 2018

Laxman Pai, Opalesque Asia:

20% of all hedge funds launched this year are cryptocurrency-focused, meaning they invest largely, or exclusively, in cryptocurrencies like bitcoin, ethereum and ripple, said a new study.

90 cryptocurrency hedge funds launched in the first three quarters of 2018, on track for 120 for the fiscal year, according to Crypto Fund Research.

The research said that the record rate of new crypto hedge fund launches defies traditional thinking that hedge funds tend to launch most frequently in bull markets. Leading cryptocurrencies, like Bitcoin and Ethereum, are down 50% or more YTD 2018.

Overall, approximately 600 hedge funds, including both traditional and crypto funds, are expected to launch in 2018, according to Hedge Fund Research. 120, or 20%, of these will be crypto hedge funds, it said.

Crypto hedge funds invest largely, or exclusively, in cryptocurrencies like Bitcoin, Ethereum, and Ripple. Some also invest and trade in initial coin offerings (ICOs). In 2017, crypto hedge funds accounted for 16% of new hedge fund launches, up from less than 3% in 2016.

Crypto hedge funds boom begins from early 2017

The number of crypto hedge funds has skyrocketed since the beginning of 2017. Two thirds of all currently operational crypto funds have launched in the last seven quarters, through Q3 2018.

While crypto hedge funds are now one of the fastest growing hedge fund strategies, crypto funds still make up a small perce......................

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