Nearly 70 crypto-focused hedge funds that largely cater to institutional investors, such as pension funds and family offices, have closed this year.
The number of new funds launched this year is also less than half the number of launches in 2018, according to U.S.-based Crypto Fund Research, as reported by Bloomberg Wednesday. Region-wise, North America led the number of crypto fund closures this year at 28, followed by Europe (23), Asia-Pacific (14) and others (3).
The inherent volatile nature of bitcoin and other cryptocurrencies has kept institutional investors at bay. “The market is definitely retail driven and will remain so for the foreseeable future,” Nic Carter, co-founder of crypto market tracker Coin Metrics, was quoted as saying in the report.
There are currently 804 cryptocurrency funds in total, 355 of which are hedge funds and 425 are venture capital funds, according to Crypto Fund Research’s website. Arrington XRP, BlockTower Capital, Brian Kelly Capital Management, Digital Currency Group and Fenbushi Capital are the top five cryptocurrency funds, per the researcher.
“To me, the fact that there is any institutional adoption for Bitcoin only 10 years into existence is a radical success and beyond what anyone could have imagined just 3 or 4 years ago,” Spencer Bogart, general partner at Blockchain Capital, was quoted as saying in the report.