When Bitcoin and the crypto market started to skyrocket in 2017, several enterprises and investors decided to start crypto-related hedge funds. Some of them had incredible profits when Bitcoin reached $20,000 in December 2017, but could they still be profitable in a bear market? Apparently, in the first quarter of 2018 they were.
Hedge Funds Always Profiting
Since the start of 2018, bitcoin and the crypto market is in a bear market. The prices of the most important cryptocurrencies dropped around 70% from their all time high. But crypto hedge funds seem to be unaffected by this decline in the price of cryptocurrencies. 
The first quarter of 2018, has been good for crypto hedge funds, that are reporting profits amid a downtrend market. These institutions are searching for ways to profit from volatility in the crypto markets, a technique that has proven to be better, sometimes, than holding.
This situation may be very promising for these funds that are trying to capture the attention of institutional investors. Wealthy individuals and institutions are really interested in the crypto market because they see an important source of profits. But the main problem is that they do not want to be exposed to the usual price swings that the market usually experiences.
For example, Market Neural Liquidity SP-Institutional, registered 5.7 percent of profits in the first quarter of 2018, according to Bloomberg. Pivot Digital Trading-2, managed by a Hong Kong-based firm, generated 30% returns in the first quarter of the current year.
Of course there have been some hedge funds involved in the crypto market that reported some loses. We are talking about Silver 8 Partners, that dropped 32 percent during this first quarter.
The firm said in a newsletter:
“High levels of uncertainty and low market liquidity make investments in blockchain related assets volatile. They tend to overreact to cycles of euphoria and pessimism, where the market price itself acts as a catalyst for further momentum.”
But compared to the earnings the hedge fund has since 2016, this drop seems not to damage the reputation of it. Since 2016 the fund made more than 1,000 percent since 2016.
