It is announced that crypto-currency hedge funds in 2018 bear losses of up to 23%,
Institutional investors turned towards cryptocurrency in 2017, after surprising growth of bitcoin cost. Such funds turned out to be about 150. But today, after a 50 percent drop in the leading crypto currency, many of them are on the verge of bankruptcy. Kyle Samani, Co-Founder Of Multicoin Capital, Austin, Texas, says: “New capital comes very slowly even in an influential fund like ours”. The fund has under management about $50 mln.
At least nine funds have been closed. Many funds start to delete their websites and social networks account. Alpha Protocol, a distributed fund, posted a message as follows: “Taking into account potential regulatory and market risks, we decided to return funds to investors”.
Perhaps the largest cryptocurrency hedge fund with about $250 mln under management Polychain Capital in January made decision not to enter the market in Canada. Billionaire Michael Novogratz refused to launch a fund. And started to create a trading cryptocurrency bank and invest in blockchain technologies.
By the end of 2018 up to 10% of crypto funds will be closed according to Lex Sokolin, director of financial engineering at Autonomous Research. Rick Marini (Protocol Ventures’s) assumes that only about 50 funds will attract external capital sufficient to provide business. Others will have problems.