Will Bitcoin Hedge Funds Continue To Outperform Traditional Markets
The very first hedge fund managers who decided to invest in cryptocurrency were viewed as brave by some, foolish by others.
Still, as others watched from the sidelines, these managers have masterminded mind-boggling profits. Major cryptocurrencies have increased in value every year, and Bitcoin’s incredible run to just under $20,000 last year have left investors in these hedge funds feeling like they’ve struck gold.
Cryptocurrency hedge funds hit the jackpot
The Pantera Bitcoin Fund is believed to the most successful of the bunch.
In 2013, this was one of the first in the world to buy into digital currencies. The returns for that fund were revealed in December 2017 to be 25,004%.
The top-performing hedge fund in the world last year returned just 148%, while the average hedge fund attracted returns of 8%.
The future of cryptocurrency hedge funds
In spite of these incredible returns, only $3 billion of a $3 trillion hedge fund industry is allocated towards blockchain technology.
There are only around 150 hedge funds focused on this industry, although this figure has been tipped to increase by two or three times in 2018.
That’s still a small proportion of the overall industry. It would appear many hedge fund managers remain wary of the potential for a cryptocurrency crash.
The fact is: those who feel this way have missed out on market growth every single year.
Why invest in hedge funds?
Hedge funds allow investors to diversify their risk by putting money into a large group of companies. Actively-managed funds will cost more in fees, but allow customers to watch the returns roll while they put their feet up.
Last year Bitcoin was the secret sauce that made cryptocurrency hedge funds taste extra-sweet for investors. To learn more about putting money into cryptocurrency hedge funds, check out the START INVESTING section of coinconnecter.com.
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