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Alternative Market Briefing

150 surviving crypto hedge funds post 46% median loss in 2018

Tuesday, May 14, 2019

Laxman Pai, Opalesque Asia:

A report by PwC, based on conversations with managers at around 100 largest global crypto hedge funds, showed that crypto hedge funds suffered a median -46% loss last year.

"2018 was a challenging year in crypto markets, with Bitcoin down -72%. The median crypto fund returned -46%, which in absolute terms is a poor return for investors and highlights the extremely volatile and high-risk nature of this asset class," said the survey.

Around 150 cryptocurrency hedge funds survived last year, which saw bitcoin (BTC) falling from $20,000 to just $3,000, said the report. The 150 active crypto hedge funds have been collectively managing $1bn AuM (excluding crypto index funds and crypto venture capital funds).

Over 60% of these funds have less than $10m in AuM with fewer than 10% managing over $50m. The average crypto hedge fund AuM as of Q1 2019 is $21.9m.

The research showed that crypto hedge funds managed a median $4.3m between January and March, compared with $1.2m in January 2018, suggesting demand for exposure to crypto held up even as bitcoin slumped in price by 75%.

36% of funds surveyed use or can use leverage and 74% can take short positions. Of the funds surveyed, 44% pursue discretionary strategies, 37% quant and 19% fundamental, said the survey.

Funds tend to be domiciled in the same jurisdictions as traditional hedge funds, with the top three jurisdictions for the fund entity being the Cayman Islands (55%), the Unit......................

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