Digital Assets: Crypto Hedge Funds Shuttered in 2019 At a Stunning Pace

December 31, 2019 | Digital Assets, Investments, News

A research firm say 70 closed from January through November

Crypto hedge funds shuttered at a rather alarming click in 2019. According to Crypto Fund Research, 70 such funds had closed by early December. That means there was still time for another few of these funds to close as the month comes to a close.

To put that number into perspective, Crypto Fund Research says there are 804 cryptocurrency funds. But crypto hedge funds totaled just 355, based on the firm’s definition. That would represent a rather large chunk of these hedge funds closing their doors.

Why Crypto Hedge Funds are Closing

The crash of Bitcoin prices in 2018 has had a psychological impact on the industry. Institutional investors have largely remained on the sidelines while “bag holders” continue to hold on and hope for support. While many funds launched in 2018, the number of new funds has declined.

In addition to weaker prices, hedge funds have faced an uptick in competition from traditional investment avenues. For example, Fidelity Investments has made it easier for retail investors to own cryptocurrencies without having to pay management fees or join a fund.

Crypto Fund Research said that North America saw the largest number of closures through November 30, 2018. The data says that 28 North American funds closed at that time. The research team said that 23 of these funds closed in Europe, 14 closed in Asia, and 3 closed in other regions.

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