Cryptocurrecy’s Use in Hedging Gaining Traction
Cryptocurrencies have lost 100’s of Billions in total market cap since December 2017, add to that continued confusion about its regulatory status in the US and elsewhere, we might expect that the nascent crypto hedge fund industry would be struggling.
But, a report by CryptoGlobe suggests that this is not the case. In fact, the pace of investments in hedge funds with a cryptocurrency focus has actually picked up significantly YTD.
Data from Crypto Fund Research indicates that by 15 June of this year, 216 investments had been made in these funds, compared with 236 investments for all of Y 2017.
It is clear that the cryptocurrency hedge fund space is continuing to grow despite uncertainties in the digital currency world itself.
Crypto Fund Research indicates that investments in the digital hedge fund space from 1 January through 15 June of this year totaled $637.7-M. In Y 2017, the total inflows for these funds for the year were $496.7-M meaning that the Y 2018 investments in the space have already surpassed those of last year.
Beyond cryptocurrency hedge funds, crypto-related venture capital is also thriving in Y 2018.
Crypto Fund Research ranks venture capital firms according to criteria such as capital outlay, investment activity overall, recent activity in the blockchain space and overall blockchain investment experience.
According to this week’s report, Digital Currency Group leads the overall group of blockchain venture capital funds. The company, based in New York, has made 58 total investments worth $78-M with 15 of those investments happening in the past 12 months.
Next up was Pantera Capital out of Menlo Park, California. And Andreessen Horowitz recently revealed a $300-M crypto fund in the works, was 4th on the list.
Crypto Fund Research CEO explained that “the four criteria we used [reflect] not only total investment but also how long they’ve been investing in blockchain and how active they are today, not just a year or three ago … the industry is changing rapidly. So what’s most accurate today won’t be as correct next month.”
Currently, Bitcoin is trading at 6,719.9849, +132.31, +2.01%, at the close: 5:35a BST.
Have a terrific weekend.