Despite the fact that the entire cryptocurrency market has declined substantially since the start of 2018, specialized hedge funds are being launched at a record pace. Now, the company behind one of the first blockchain exchange-traded funds (ETFs) is set to launch a $100 million cryptocurrency hedge fund.
Getting Serious
Reality Shares – an asset managing company which is mostly known for being the owner of one of the first blockchain ETFs is reportedly set to launch a $100 million cryptocurrency hedge fund. Citing a person familiar with the firm, Business Insider reports that the company has already managed to get a commitment for $25 million.
The fund will purportedly be a mix of a venture, directional strategies, and arbitrage. Interestingly enough, the California-based company saw its total assets under management spike after its ETF began trading in January this year.
A Serious Increase in the Number of Hedge Funds
Despite the bear market that has taken control of 2018 ever since January, specialized cryptocurrency hedge funds are being launched at a record pace. A recent research from Crypto Fund Research revealed that there are over 165 new cryptocurrency funds launched YTD which is already more than the total number of funds in 2017.
In total, there are 466 specialized cryptocurrency investment funds where the larger majority of them (255) are set up as traditional hedge funds. A little less than 200 are set up as venture capital funds and only 16 of them represent private equity funds.
Despite the seemingly large number, most of the funds manage $10 million or less in their holdings. There are only 28 of them which account for more than $100 million in digital assets.
The sheer increase in the number of hedge funds in 2018 is somewhat surprising, given the fact that the total capitalization of the entire cryptocurrency market has lost upwards of 70 percent YTD. It currently stands at a little more than $200 billion where it peaked at nearly $800 billion back in December 2017.
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