Despite the persistent bearish environment and unfavorable regulatory conditions in various parts of the world, the number of new crypto funds unveiled this year is expected to break last year’s record.
So far the number of new crypto funds that have already been launched is 96 and it is projected that by the end of the year the total number will reach a figure of 165, against last year’s 156. In 2016 the figure was 42. Combined there are now 466 crypto funds spread across the globe according to Rohnert Park, California-based Crypto Fund Research.
While 55% of the crypto funds launched so far are hedge funds, 42% are crypto venture capital funds and 3% are private equity funds which have come on stream with the maturation of some blockchain firms.
“If 2017 was ‘the year of Bitcoin’, 2018 is shaping up to be the year of the crypto fund,” wrote Crypto Fund Research in a statement.
Of the 466 cryptocurrency funds that have been launched so far, 255 of them are crypto hedge funds. Per Crypto Fund Research, Crypto hedge Funds are the hedge fund sector’s fastest growing segment. Additionally, a couple of the best performing hedge funds last year were crypto funds. However, the value of the assets that crypto funds hold is below 0.1% of what hedge funds hold.
In terms of assets under management, the analysis conducted by Crypto Fund Research shows that 28 crypto funds held more than US$100 million in assets and these funds included Polychain Capital, Arrington XRP and Galaxy Digital Assets. Of the 252 crypto funds in the U.S. only 84 are registered with the Securities and Exchange Commission.
At 252 the United States has the highest number of crypto funds followed by China/Hong Kong with 34 crypto funds and the United Kingdom with 29 funds. In the U.S., California is the leading state with 121 crypto funds.
With 9 crypto funds having been launched this year already, California’s San Francisco is this year’s top city. It’s also the leading city globally with the total number of crypto funds being 55. New York City follows with 44 crypto funds and London is third with 25 crypto funds.
Despite the projected positive outlook, there are worries that with a prolonged bear market some of the crypto funds will not survive.
“While volatility in the crypto markets can attract some investors to sophisticated crypto funds. It remains unclear if the industry can support such a large number of funds, with limited track record, if we experience an extended bear market,” Crypto Fund Research’s Josh Gnaizda said.
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Last modified: May 20, 2020 6:08 PM UTC