Hedge Funds: Bitcoin In Play as Funds Dive Back In

https://dailyalts.com/wp-content/uploads/2020/07/bitcoin.jpeg

Crypto Hedge Funds Move In On Bitcoin. 

Bitcoin fell by 50 percent in cryptocurrency’s price in March, but subsequently rose back up to trade at $11,200.  Investors should caution as this trend could lead to another major slump — most notably like the 2017 80 percent Bitcoin slump.  Especially with the uncertainty of COVID-19, investors will need to keep their eyes on Bitcoin.  Several crypto hedge funds have closed as a result of the pandemic.  Bitcoin remains unreliable, as many people are trading with lots of debt.

Despite its lack of predictability and abundance of risk, some investors remain emphatic about the cryptocurrency.  Some New York investors and banks are considering Bitcoin and cryptocurrency as a possible hedge against a currency-related disaster.  Investor Paul Tudor Jones cites Bitcoin’s scarcity premium as a plus.  He claims that between one and two percent of his assets are in digital currencies, which he uses as downside protection.  Also, Renaissance Technologies’ fund, Medallion, will invest in Bitcoin. 

This is becoming an increasingly logical method of insurance against a financial downfall.  In a Bank of America survey, 71 percent of stock managers believe that equities are overvalued.  This leads many investors to believe that diversifying is the best option.  This diversification could include Bitcoin in the portfolio.  

Outlook. 

Still, Bitcoin is still uncharted and heavily unpredictable territory.  The currency’s artificial supply and lack of universal adoption makes it difficult to invest in.  According to research firm Chainalysis, 60 percent of Bitcoin supply is hoarded and 20 percent is lost.  The influx of hedge funds in the crypto market will further contribute to not only the positives of Bitcoin, but also the negatives.  Ultimately, the rising interest in Bitcoin will likely be short-lived.

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Shape

Latest Alternative Investment News

https://dailyalts.com/wp-content/uploads/2021/07/bitcoin-2668211_640.jpg
Digital Assets: Bitcoin Closes In On $40K After Amazon Rumors Spark Rally
July 26, 2021     Digital Assets, News

Bitcoin, the leading cryptocurrency, which had been in a downtrend since its April highs, and tested $30,000 on more than one occasion, surged nearly 15% after a rumor that Amazon…

https://dailyalts.com/wp-content/uploads/2021/07/rivian-r1t-7.jpg
Venture Capital: Rivian Lands $2.5B; Plans Second EV Plant Including For Batteries
July 26, 2021     Latest News, News, Venture Capital

Electric vehicle maker Rivian announced Friday (July 23, 2021) its close of a $2.5 billion funding round led by Amazon’s (NASDAQ: AMZN) Climate Pledge Fund, D1 Capital Partners, Ford Motor…

https://dailyalts.com/wp-content/uploads/2021/07/champagne-2178775_640.jpg
Liquid Alternatives: Three Reasons
July 26, 2021     Liquid Alternatives, News

Spawned after the 2008 financial crisis, liquid alternatives have disappointed investors. During the 2010s, these instruments averaged an annualized gain of 1.66%. Writing in Morningstar, columnist John Rekenthaler makes a…

https://dailyalts.com/wp-content/uploads/2021/07/Ez4eEsTWUAMC8Gz.jpg
FinTech: UK-Based PensionBee Reports Assets Under Administration Have Doubled In A Year
July 26, 2021     FinTech, News

An influx of new customers has boosted two-fold PensionBee’s assets under administration as at June 30, 2021. Further, in a landmark year, PensionBee (LON: PBEE) raised £55 million from an…