Crypto Funds Being Launched at Record Pace
What's the fastest growing segment of the hedge fund world? If you've been paying attention, this might not be a surprise - it's cryptocurrency hedge Funds. In fact, more than 70 Crypto Funds were launched in 2017, more than the amount launched in all preceding years.
Cryptocurrency hedge funds invest in existing cryptocurrencies like Bitcoin and Ethereum, Initial Coin Offerings of new cryptos, or in blockchain companies. Collectively, hedge funds investing in these digital assets have exploded. This is largely due to a growing perception that cryptocurrencies are gaining legitimacy as investments. Of course, the huge increases in crypto prices in 2017 play a large role in this as well. Bitcoin, for example, was up more than 1200% in 2017. A large number of crypto hedge funds were launched in the latter part of 2017 according to research from Crypto Fund Research.
It remains to be seen what the effect of falling crypto prices in 2018 will have on existing crypto funds as well as the launch of new crypto hedge funds.
While the number of new crypt fund launches was extraordinary, it's important to keep in mind assets are still quite low. In total, crypto funds have a little over $3.1 billion in assets, or less than .1% of total hedge fund assets. That number is expected to grow significantly as investors open up to crypto funds, and cryptocurrencies in general.
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2018 Crypto Fund Launches