Hedge funds that focused on cryptocurrencies are indeed thankful for April 2018, and they have all the right to be. The digital currency sector recovered considerably and in the process, ended a two-month losing streak.
Hedge Funds Mark Recovery
Recovering from the 34 percent decline in March 2018, the Hedge Fund Research (HFR) Blockchain index reported a 47.1 percent leap in crypto funds’ performance in April 2018. Thanks to this, crypto’s year-to-date (YTD) losses are now narrowed down to 19.3 percent.
However, there is a discrepancy between the figures shared by the HFR Blockchain Index and the HFR Cryptocurrency index as the latter showed a higher number of returns at 48.52 percent and reported the YTD losses to be at 17.48 percent.
HFR president Kenneth Heinz commented:
“Hedge funds extended gains in April to begin the second quarter and also extended the YTD outperformance of most equity market indices, with support and contribution from Energy and Volatility exposures.”
Additionally, the HFR Fund Weighted Composite Index obtained a total of 0.38 percent which ultimately brought the year-to-date performance to a slight rise of 0.39 percent. This was opposite to the decline in year-to-date equity market standard S&P 500, DJIA, DAX, FTSE, and MSCI World indices.
Heinz provided additional insights:
“The process of developing better politics for transitions and economics for creating long and short opportunities across a series of specific exposure and industries is being continued. These industries are inclusive of fixed income/interest rate-sensitive equities, retail, M&A, technology, and blockchain. This is a sure-shot process that aims at driving unmatched performance throughout mid-2018.”
The two-fold rise of the total market volume in 2018 was predicted by Crypto Fund Research earlier, based on the launch of various funds. The percentage gains of crypto-focused funds in April goes on to strengthen the prediction.
The study informed:
“Apart from being the fastest growing segment of the hedge fund industry, Crypto hedge funds were also amongst the top performing hedge funds in 2017.”
VCs Quickly Turning Attention Towards Blockchain
Shifting attention from the conventional digital asset fund, hedge funds, fintech VC firms are waking up to blockchain’s potential and are investing in the domain.
Tagomi, for one, a relatively new enterprise in cryptocurrency, has received backing from Peter Thiel of PayPal. The firm aims at providing solutions to the many challenges faced in crypto trading to new investors, and serve as a reliable platform for institutional investors to get exposure to digital assets.