In the cryptocurrency world, this year has not turned out as many had expected. A continued bear market has hurt not only investors but also crypto funds that launched looking to get a share of the extraordinary returns cryptos were promising.
Crypto Funds Report Record Losses While Some Close Doors Forever
Ten months into the year, some of these firms are reporting record losses while others are closing down. One good example is the Pantera Digital Asset Fund. Recently, a report surfaced on social media that reveals the U.S. investment firm has made losses of over 40.8 percent.
Figures that have contributed to the fund’s year to date losses that have risen to 72.7 percent. Also, the fund’s compound annual growth rate (CAGR) has dropped by more than 50 percent since launch.
Commenting on the new report, Collin Crypto, a Twitter user tweets:
“Pantera releases some painful performance numbers for their new #crypto fund.”
It’s something that has everything to do with the crypto market slump. An action that has seen the industry lose over 70 percent of its market cap since the beginning of the year.
It’s something that explains why many ICO projects have sold their token assets causing a selling stir.
The deteriorating health of the crypto market has also affected other hedge fund managers like Digital Asset Fund.
The fund had invested heavily on blockchain projects by purchasing tokens to ensure it got maximum profits.
Bitcoin, the crypto funds’ top asset has not helped matters also as it has shed a significant amount of its value.
More Reporting Massive Losses
The poor performance of crypto funds is also highlighted in an August report published by Autonomous Next. The FinTech analysis firm said that a majority of hedge funds suffered at least 50 percent losses in the first half of 2018.
Others like Multicoin Capital and Polychain Capital have also reported losses. Galaxy Digital LP, a fund owned by Mike Novogratz has reported losses of over $175 million.
Also, a total of nine funds including Alpha Protocol and Crowd Crypto Fund have decided to close down.
Kyle Samani, the Cofounder of Multicoin Capital, says that new capital has slowed for even high profile funds theirs.
Lex Sokolin of Autonomous Research is of the opinion that things are likely to get worse for these funds. He predicts that 10 percent of all crypto funds will die by the end of 2018.
With the market proving unprofitable for now, diversification seems to be the way out for these companies. Pantera already has started on this by investing in projects with maximum potential.
It has invested in ErisX a cryptocurrency spot and futures exchange.
It’s also heavily invested in other blockchain projects like Abra, Brave, Ox, Shapeshift and Ripple.
Basil has three years of freelance experience writing on disruptive technologies. He focuses on breaking news and education pieces; helping to spread the gospel of Blockchain. He hopes to have his own blockchain company one day; helping the world through its innovative ledger technology
