Is cryptocurrency becoming far more mainstream and legitimate than we all realize? According to a new report, it just might be.
Cryptocurrency Is Growing, According to Hedge Fund Managers
Cryptocurrency is small when compared to the world of fiat, but it sure doesn’t have to stay that way, and according to a new report, more investors are flocking to crypto than ever before. In fact, hedge fund asset managers claim that in 2019, more people invested in digital currencies than ever before. At the end of 2018, the amount of money invested in crypto was believed to have been around $1 billion, while at the end of 2019, this figure jumped to well over $2 billion.
In addition, the average hedge fund was believed to hold approximately $44 million in total crypto assets by the end of 2019. The previous year, the number was slated to be around $21 million, meaning that within a 12-month span, the amount of money invested in crypto more than doubled.
According to a survey conducted by PwC and Elwood Asset Management Services Ltd., the reason for this surge may have had something to do with the fact that bitcoin soared by more than 90 percent. Remember when it started the year out in the mid-$3,000 range? By summer, it was trading for over $13,000, and even though it ultimately ended 2019 at just over $7,000, the currency is believed to have gotten everyone aboard the crypto train thanks to its mid-July spikes.
This is quite similar with what occurred at the end of 2017. At that time, the currency rose to its all-time high of nearly $20,000 per unit. As a result, crypto exchanges saw more than 100,000 people jump aboard and sign up for new trading accounts, as many individuals appeared to be experiencing thoughts and feelings of FOMO (fear of missing out). Sadly, bitcoin would spend the whole next year tanking like nobody’s business, meaning everyone who joined up last minute probably took a hit to their investments.
People Seem to Like the Price Swings
Still, this volatility could be what continues to attract certain people to the space. According to Henri Arslanian – PwC global crypto partner and leader – people are very intrigued by the idea that bitcoin can potentially spike to high numbers overnight and without warning. He explained:
The volatility of crypto markets offers many opportunities for quant traders. The performance of crypto quant funds tends to be more linked with market volatility rather than market performance… I expect the crypto hedge fund industry to grow significantly over the coming years as investing in a crypto fund may be the easiest and most familiar entry point for many institutional investors looking at entering this space.
According to the report, bitcoin remains the most traded cryptocurrency with more than 97 percent of customers owning it.