Crypto hedge funds comprise 20% of all hedge funds

The
Bitcoin logo is seen on a pillow on display at the Consensus 2018
blockchain technology conference in New York City, New York,
U.S., May 16, 2018.

REUTERS/Mike
Segar

• 
  Although the crypto market has had a tough run so far this
  year, crypto hedge fund launches are on pace for a record
  high in 2018, according to a new report. 
• About 600 hedge funds are set to launch this year, and
  20% of them will be crypto-focused.
• But while interest in crypto hedge funds is picking up,
  the value of assets managed by those funds is still meager,
  standing at less than $4 billion.

While the crypto market has had a tough run this year, the
number of new crypto hedge funds is soaring. 

90 crypto hedge funds launched globally since the beginning of
2018, and the total is on pace to reach 120 by the end of the
year, according to a new report from Crypto
Fund Research, a provider of analysis on crypto investment
funds.

If that happens, crypto funds will comprise 20% of all total
hedge fund launches in 2018. 

To be sure, crypto hedge funds only started to grow in popularity
last year. To put these numbers in context, crypto hedge funds
constituted 3% of new hedge funds worldwide back in 2016, but the
proportion jumped to 16% in 2017.  

The
number of crypto hedge fund launches is poised for a record
year.

Crypto
Fund Research

The rise of crypto hedge funds has now become a global
phenomenon, with countries including Australia, China, Malta,
Lithuania, the UK, and Mexico seeing new fund launches this year,
according to the report. About half of these funds launched this
year are based in the U.S.

But while interest in launching crypto-focused funds is picking
up, the value of assets managed by those crypto hedge funds is
still small at less than $4 billion, compared to the entire hedge
fund industry, which manages more than $3 trillion assets
worldwide. 

Institutional investors have tread carefully around the crypto
market, due to the industry’s extreme price swings, regulatory
uncertainty, and potential for fraud. The industry also faces
new enforcement
actions against crypto firms.  Bitcoin has
fallen
about 66% from its peak in January, and the total market cap
for all cryptocurrencies has dropped by roughly 70% since
mid-January, according to CoinMarketCap.

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