Over the past year and a half, there has been a vast increase in the number of hedge funds paying attention to cryptocurrency. As such, a lot of people are wondering which currencies those companies are investing in. The answer will surprise a lot of people, but in a good way.
Cryptocurrency Hedge Fund Strategy
Whenever a new cryptocurrency hedge fund emerges, it seems to garner a lot of attention fairly quickly. There is a good reason for that, as cryptocurrencies are still extremely appealing to consumers. Investors prefer to be exposed to volatility through hedge funds, rather than buy their own coins from exchanges or ATMs.
At the same time, one has to wonder what these cryptocurrency hedge funds are really investing in. Unlike what most people might expect, there aren’t too many companies which actually hold Bitcoin or Ethereum at this stage. That is according to an infographic shared with us via email. Instead, we see some other interesting projects listed, even though there are not many actual cryptocurrencies on this list.
Two of the projects receiving some attention among hedge fund managers are TRON and ICON. Several of these companies invest in Zilliqa, which won’t come as much of a surprise to most people. 0x, OmiseGo, Aelf, and Golem are also relatively popular among hedge funds. Other notable names include Fusion, Orchid, Bancor, and Merculet. All things considered, it’s a well-balanced portfolio for most companies.
While this only represents a sampling of the cryptocurrency hedge funds out there, an interesting trend is evident. With so many hedge funds diversifying their portfolios to include altcoins and ICO tokens, it seems there is still a fair amount of hype associated with all of these projects. The ones which have received a lot of solid backing may be in the best position to succeed in the years to come.
Even so, there are a lot of problems facing these hedge funds. Their ROIs for 2018 are still in the deep red after the stellar year of 2017. Even so, the month of April was a lot more positive in this regard, and potentially May as well. Unfortunately, the negative momentum present in the first half of 2018 has forced nine crypto funds to shut down so far. Despite those losses, 20 new funds have popped up, which will be an interesting statistic to monitor as the year progresses.