Is There Truly a Bear Market When Crypto Hedge Funds are Launching at Record Levels in 2018
Crypto Hedge Fund Launches Are In A Record Level In 2018
Despite the fact that the cryptocurrency market has had a severe bear market in 2018, crypto hedge funds launches are achieving new all-time highs during the year. A new research made by the Crypto Fund Research has indicated that a total of 90 crypto hedge funds were launched in the first three quarters of this year. Some predictions state that up to 120 funds can be launched during the full year.
The number of hedge funds that will be released in 2018 will be near 600, according to the numbers, so 120 of them is a notable 20% of all the hedge funds being created this year. This figure shows that the investors are getting more and more interested in this kind of investment and that a number of companies are now focused on catering for this niche as well.
While 20% is not that much when compared to 16% last year, you have to notice that the market was in a full bull run mode last year, so the numbers actually going up is sort of incredible. When you compare it to 3% in 2016, it is certain that the crypto market is here to stay.
The Decline of Traditional Funds
One of the main reasons that may have something to do with the increase of crypto-based hedge funds is that there is a certain decline in the traditional hedge fund launch. The trend was described by Joshua Gnaizda, the founder of Crypto Fund Research, as a “notable alteration” and, while the low prices and regulatory issues might play a role to make many problems in the industry, there is hope.
While some people believe that these are unfavorable conditions, it is certain that hedge fund managers are not so interested in the trends and are believing in the potential of cryptocurrencies.
The company also points out that crypto hedge funds are part of a larger group of crypto-based funds and that these other groups are based in venture capital and private equities. When these are grouped together, the yea has 622 crypto funds across all the categories and 303 of these funds are crypto hedge funds which have, together, just short of $4 billion USD in assets.
Around half of these crypto funds are based in the United States. Some of the others are based mostly in places like Australia, China, Malta, Switzerland, the United Kingdom and the Netherlands.
Gnaizda has concluded after the research that the number of new launches is not growing at a sustainable long-term rate, so it will have a significant slowdown in the coming years and will tend to stabilize.