The common belongings beneath administration (AUM) of worldwide cryptocurrency hedge funds elevated three-fold within the first quarter of 2019, new analysis signifies.
Consultancy agency PwC and funding agency Elwood Asset Administration collectively published a report on Monday, saying that the median crypto hedge fund AUM has grown to $4.three million on the finish of Q1 2019 as in comparison with $1.2 million in January 2018.
The expansion signifies that funds have been “comparatively profitable” at elevating investments regardless of bearish market situations in the course of the interval, the companies stated.
The report, primarily based on interactions with 100 crypto hedge funds, additional highlighted that the common fund AUM was $21.9 million as of Q1 2019 and 60% of funds have lower than $10 million in belongings whereas solely lower than 10 p.c are managing belongings over $50 million.
Crypto hedge funds additionally carried out higher than bitcoin final 12 months, the report discovered. Whereas bitcoin plunged about 72 p.c in 2018, the median crypto hedge fund misplaced solely 46 p.c over the identical interval, “indicating that these managers had been efficiently in a position to outperform their benchmark.”
Nonetheless, efficiency diverse primarily based on the kind of technique adopted. As an illustration, the median “quantitative” fund returned eight p.c in 2018, whereas the median “elementary and discretionary” funds carried out negatively, with returns of -53 p.c and -63 p.c respectively, in response to the report.
In a separate statement, PwC Hong Kong director Henri Arslanian, stated:
“The crypto hedge fund business in the present day might be the place the normal hedge fund business was within the early 1990s. We anticipate the business to undergo a speedy interval of institutionalisation and implementation of sound practices over the approaching years.”
Elwood CEO Bin Ren shared related view saying that there’s “rising proof of institutionalisation” within the cryptocurrency area, which is a constructive step in the direction of digital belongings being acknowledged as an asset class with “true viability and longevity.”
One other report from Crypto Fund Analysis final October showed that crypto hedge fund launches are spiking to all-time highs. There have been 90 launches within the first three quarters of 2018, and the entire was anticipated to achieve as excessive as 120 for the monetary 12 months.
PwC picture by way of Shutterstock