Profitability and demand for cryptocurrency hedge funds declined along with the rates of cryptocurrency after an incredible rise at the end of last year. About this in its material told Bloomberg.
“The inflow of new capital has slowed, even in leading funds such as ours,” said Kyle Samani, co-founder of the American fund Multicoin Capital, launched in August last year and managing $50 million in assets.
At least 9 funds have already closed, and some of them, such as the Crowd Crypto Fund, hastened to remove their sites, accounts in Facebook and Twitter.
“Taking into account the potential risks of regulation and the market, AlphaProtocol decided that the best approach would be to return funds to the participants of a closed sale,” wrote one of the funds on his website.
Polychain Capital, which is probably the largest hedge fund in this space, under whose management last September, was $250 million, in January of this year decided to abandon the public launch in Canada. Billionaire Mike Novogratz also changed his mind about opening his own cryptocurrency fund at the end of last year and decided to focus his efforts on creating a crypto bank.
The index of profitability of the cryptocurrency hedge funds Eurekahedge, which finished last year with the indicator +1708.50%, since the beginning of this year has fallen by 23%.
Up to 10% of hedge funds may be closed by the end of this year, expects Lex Sokolin, director of financial strategy of Autonomous Research LLP. Rick Marini, investing in such funds as Multicoin and Polychain, suggests that no more than 50 funds will be able to raise additional capital to stay afloat and be able to serve institutional investors. The rest are waiting for problems.
Despite the long decline in rates, new funds do not cease to appear, counting on the fact that cryptocurrencies and start-ups using the underlying technology will still be able to open their potential.
Marini says that he receives 3 offers from new funds every day. 2 out of 3 can attract his attention, but throughout the year 2018 he intends to invest his funds in only 1-2 new funds.
“Let’s see what happens at the end of the year,” he says.” People who were able to demonstrate a good profit last year are trying to make money in this, but this year is different.”