The value of Pantera Capital’s Digital Asset Fund, which solely focuses on promising tokens, has sunk since it was launched in December 2017.
According to a report that first surfaced on social media, the U.S investment firm negated an estimate of 40.8% returns to its investors up to now. Besides, it posted a 72.7 percent loss year-to-date. Further, statistics show that the fund’s compound annual growth rate was down too by more than 50% since its commencement.
— Collin Crypto (@CollinCrypto) October 5, 2018
It’s also worthy to note that, since January 2018, the cryptocurrency market has lost over 70 percent of its market capitalization.
Major Sell Off By ICOs Causing A Stir In The Market
A lot of initial coin offering projects have been selling a majority of their tokens for fiat currency, causing a lot of stir in the market. This has also caused the health condition of the entire ICO market to deteriorate over time, with investments made into majority of them failing to yield any benefit.
Bitcoin, the principal crypto asset has also been doing poorly in the market, failing to minimize the losses as it maintains its bearish bias since January 2018.
According to a report by Autonomous Next, a FinTech analysis firm, most of the hedge funds showed a 50 percent loss in HY18. In fact, the global director of finetech strategy at the research firm, Lex Sokolin, believes that crypto funds won’t go for long, and all of them will likely end by the close of 2018.
A crypto fund investor known as Rick Marini also believes that only a handful of hedge firms will survive the current cryptocurrency plunge.
Mike NovoGratz’s Galaxy Digital is not exclusion. It reported losing $175 million in damages, as well as Multicoin Capital, Polychain Capital, and many others. Nine funds including Crowd Crypto Fund and Alpha Protocol decided to close down because they were unable to maintain their status quo through cyrtos’ inherent volatility.
“New capital has slowed, even for a higher-profile fund like ours,” said Kyle Samani, co-founder of Multicoin Capital, an Austin, Texas-based company.
Pantera Capital Looking Beyond Its Poor Returns
Pantera Capital has diversified its assets into projects that have the possibility of maximum returns in a bid to stay relevant in the industry. For example, they were among the participants in an investment round led by futures exchange, TD Ameritrade for ErisX, a cryptocurrency sport. Some of the notable blockchain projects that Pantera boasts to show that they are making a move include Ripple, Abra, OX, Brave and shapeshift.
Bitcoin has also has reached its lowest point, believes many crypto fund managers in anticipation that they will revive profits from a potentially volatile upside correction. However, this does not affect, and the crypto hedge funds will always be vulnerable to risks that crypto investments bring.