Cryptocurrency hedge funds rise to 226 globally. The number of cryptocurrency funds which are operating currently has risen to 226. This was according to a research report by Autonomous Next. This number has sharply increased from 110 last year up to 226 currently. Furthermore, there are many other firms which are looking to launch a cryptocurrency hedge fund as well.
The main reason for the increase in the cryptocurrency funds is the astronomical returns that they witnessed in the year 2017. On an average, the cryptocurrency hedge funds were able to gain around 1400%. These types of astronomical gains are unheard of in other asset classes.
Moreover, even after the recent fall, the cryptocurrency hedge funds are only down by 5 to 6%. This is the reason why investors are putting in more and more money into the cryptocurrency hedge funds.
According to Cedric Jeanson, who is the founder of Bitspread, oftentimes the management charges, as well as the fees of the hedge funds, are on the higher side. They are mostly using passive strategies in order to create such significant amounts of returns. Thus, it is a win-win situation for the hedge fund provider as well as for the investors. This is the reason why more and more hedge funds are being consistently launched as well.
According to most of the reports, most of the hedge funds were just launched in 2017. They were able to make a significant amount of return just by consistently remaining long over a single calendar year.
Even though currently the hedge funds seem to be doing great but in the coming year, times can get more challenging. Not each and every cryptocurrency rises consistently currently. This is the reason why hedge funds need to have all their strategies. Only when hedge funds are able to evolve their strategies, they will be able to consistently make the kind of return which they have made in the past as well. This is the reason why it is important for the hedge funds to evolve their strategies.
It remains to be seen whether, in 2018, hedge funds are able to get same returns are not. Up until now, the cryptocurrency market has been highly volatile. This is the reason why hedge funds need to think about newer strategy and update their older strategies in order to make the same kind of money. Even if they are looking to make moderate returns, it is important to incorporate a proper strategy rather than just being long.
With cryptocurrency experts at the helm, most of the hedge funds will be able to outperform the market quite easily.