Optimism As Crypto Hedge Funds Spike In 2018
The study further projects that the market might see more funds emerge in the coming days.
Crypto Hedge Continue To Emerge
A new study has revealed that 2018 has witnessed an increase in the number of hedge funds hitting the market. The funds continue flooding the market despite the sector experiencing a bearish run.
The study conducted by Crypto Fund Research shows that out of all the funds, 20% make up for hedge funds alone. The survey further indicates that there was a 90% in fund launches within the third quarter. Estimations show that the figures could hit 120% by close of 2018. This is an increase of 1.69% compared to 2017. A comparison by 2016, shows that the increase has increased by 471%. By December this year, we might have a total of 600 hedge funds.
The researchers further stated that hedge funds in the crypto sector make up part of 622 crypto funds. The figures also entail funds backed by venture capital and private entities. Cumulatively, they make up to $4 billion of the entire asset base.
The surprising spike in new funds is happening at a period when the crypto industry is witnessing a strong bearish performance compared to other days. It is key to highlight that at the moment, the entire market cap has declined by over 70% compared to highs witnessed towards the end of 2017.
It is worth montioning that the new age funds hit the market towards the end of last year. Another study by Autonomous Next showed that these funds recorded a loss of over 50%.
Joshua Gnaizda from Crypto Fund Research opines that current crypto hedge launches are here to stay despite the current negative market performance being experienced. According to Gnaizda, the emergence of new hedge funds might not be sustained in the near future due to a number of issues. He pointed out that regulations and price volatility might be a major hindrance to the launch of new funds.
A look at the performance of cryptocurrencies in the third quarter of 2018, major coins have established their bottoms awaiting to rise. A look at bitcoin shows that the currency maintained a support base of below $6000. Many are throwing around theories that the maiden crypto might not deep below the mark.