As crypto costs rose all through 2019, cryptocurrency-based hedge funds’ AUM (property underneath administration) surged. However, in response to a brand new survey report from PwC and Elwood Asset Management Services Ltd., there have been some vital variations in efficiency all year long relying on the precise kind of fund.
Citing knowledge from the report, Bloomberg defined that by the top of 2019, there have been $2 billion in crypto funds’ AUM by the top of 2019, up from $1 billion on the finish of 2018; over the identical time interval, the common AUM per fund elevated from $21.9 million to $44 million.
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Throughout the 12 months, discretionary long-only funds did the most effective, with a median efficiency of 40 % and a mean 42% acquire. Discretionary lengthy/brief funds had each a mean and median advance of 33 %, whereas multi-strategy funds elevated a median 15 %.
At the identical time, quantitative funds noticed a median 30 % improve and a 58 % acquire. According to Bloomberg, the 28-percentage-point distinction between the rise and the median implies “that there were some outsized outperformers.”
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Henri Arslanian, PwC international crypto chief and associate, commented to Bloomberg that “the volatility of crypto markets offers many opportunities for quant traders,” and that “the performance of crypto quant funds tends to be more linked with market volatility rather than market performance.”
(However, it’s vital to notice that the survey outcomes have been offered by the fund managers themselves, and weren’t verified by a 3rd get together.)
Bitcoin was current in almost all of the funds
Another notable discovering in PwC and Elwood’s report was the prevalence of Bitcoin in these cryptocurrency-based hedge funds. 97 % of survey respondents mentioned that BTC was included within the fund/s they handle, whereas Ethereum was together with in 67 %; Litecoin was current in 38 %, whereas Bitcoin Cash and EOS rang in at 31 % and 25 %, respectively.
The report discovered the prevalence of Litecoin in these funds “interesting”: “Litecoin was mentioned by funds as one of their top-traded altcoins despite its market cap being relatively smaller than the other mentioned altcoins,” the report mentioned.
Additionally, the report discovered that almost half (48 %) of the buyers in hedge funds have been household places of work, whereas high-net-worth people comprised 42 % of the buyers. The remaining proportion is attributed to foundations or endowments, venture-capital funds or funds-of-funds; none of the respondents cited pension funds.
But this might change additional time: Arslanian informed Bloomberg that “I expect the crypto hedge fund industry to grow significantly over the coming years as investing in a crypto fund may be the easiest and most familiar entry point for many institutional investors looking at entering this space.”