Bitcoin

According to the PwC report, cryptocurrency hedge funds doubled assets under management in 2019

On May 11th by PwC and Elwood Asset Management Services Ltd. published “Cryptocurrency Hedge Fund Report 2020” The assets of the managed cryptocurrency hedge funds doubled in 2019.

According to the survey, total assets under management in cryptocurrency funds rose from $ 1 billion in 2018 to over $ 2 billion at the end of 2019.. The average per fund also doubled from $ 21.9 million to $ 44 million.

Correlation with the bitcoin market

The study found that cryptocurrency fund launch correlated strongly with the price of Bitcoin. As the price of Bitcoin rose in 2018, more funds were released. While the market slipped at the end of 2019, the launch of new funds showed a “significant decline”.

According to the PwC report, cryptocurrency hedge funds doubled assets under management in 2019
According to the PwC report, cryptocurrency hedge funds doubled assets under management in 2019

The report shows that in the crypto hedge fund portfolio, 97% includes bitcoin trading, followed by 67% in Ethereum. XRP and Litecoin were in the portfolios of 38% of the funds.

Source: “Hedge Fund Report from 2020 cryptocurrencies “

Almost 90% of the cryptocurrency hedge fund investors surveyed are family offices or wealthy individuals with few strategies to attract foundations, venture capital funds or pension funds, according to the survey.

Fund performance

The study identified four main strategies for cryptocurrency hedge funds. The most common are quantitative funds or funds that pursue a market approach, either directly or neutrally. It dominates the area of ​​crypto funds, with the strategy accounting for 48% of the funds.

Source: “Hedge Fund Report from 2020 cryptocurrencies “

However, the report contained a limitation: The results have been provided by the fund managers themselves and have not been verified by an independent fund manager or any other third party. There could also be significant survival bias, the report said:

“The average return on crypto hedge funds was -46% in 2018. However, the average return on the funds included in this year’s report at the end of 2019 is 74%. This provides very clear evidence that funds that underperformed in the past year are closing had to. “

As Cointelegraph previously reported, crypto funds had become the engine for the growth of the crypto industry.

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