Cryptocurrency hedge funds are “dying”

Since cryptocurrencies’ market value fell by some 20% in just under two weeks, there is a new report showing that the massive declines in prices of major alt coins have forced around 35 crypto hedge funds to close.

Bitcoin, for example, has lost more than 70% of its value as compared to its December, 2017 trading price at around $20,000 per coin. According to Crypto Fund Research, crypto-related hedge funds are now closing, with the number of companies going up since the beginning of 2018.

CFR tracks around 630 crypto-related funds, and of those, 35 have already closed. a 5% close rate just up until today.

As reported by MarketWatch, the high prices in 2017 have allowed hedge funds to house huge amounts of capital that needed to be invested soon. However, with the volatility in the crypto prices, the ventures that raised capital began operations in early 2018 and late 2017.

Just in January 2018, 44 funds have opened, according to Crypto Fund Research, The following graph shows the distribution of cryptocurrency-related hedge fund openings by month and year.


More closures of funds are expected, especially if the prices of major alt coins and the market capitalization of the entire industry keep falling down in the same trend as now.


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