The bullish market performance experienced across the cryptocurrency markets last month also manifested significant gains for many cryptocurrency hedge funds, with multiple cryptocurrency hedge fund indexes estimating a more than 45% increase in the value of leading funds.
Cryptocurrency Recovery Rally Drives Impressive Performance Among Crypto Funds
With most cryptocurrencies producing significant gains during April, cryptocurrency hedge funds also generated bullish performance last month.
The Eurekahedge Crypto-Currency Hedge Fund Index estimates the gains made by crypto funds to have been 45.43% during April. According to Eurekahedge’s historical data, April 2018 was the sixth strongest performing month ever for virtual currency funds, and the fourth highest performing month of the last four years. The preceding months to outperform April were December 2017 (+79.51%), August 2017 (+58.42%), May 2017 (81.09%), November 2013 (+405.30%), and October 2013 (+47.64)%.
Despite April’s impressive performance, Eurekahedge estimates 2018’s year to date (YTD) performance to be -21.87% so far. Eurekahedge states that its data for April 2018 is “Based on 71.43% of funds which have reported April 2018 returns as at 15 May 2018.“
Indexes Estimate Crypto Funds to Have Gained by Over 45% Last Month
Market analysis firm, Hedge Fund Research Inc. (HFR), estimates crypto funds to have produced gains of 47.1% during April – as per the company’s HFR Blockchain Index. “HFRI estimates that April’s performance has reduc[ed] the YTD decline to -19.3 percent.”
Whilst HFRI’s reporting indicates that hedge funds offering exposure to a wide array of industries also produced gains last month, snapping a two-month downtrend experienced across numerous fund indices, the percentage gains posted for April by the HFR Blockchain Index far exceed those witnessed by other HFR fund indexes.
Finance Veterans Migrate to Crypto Hedge Funds
As some of the lines between the virtual currency and the mainstream financial markets increasingly blur, cryptocurrency hedge funds appear to be attracting numerous Wall Street veterans – with recent reports revealing that Blocktower Capital has hired a number of former Goldman Sachs employees in recent months.
Blocktower Capital, which was co-founded by Matthew Goetz, a former Goldman Sachs vice president, and Ari Paul, formerly of Susquehanna, has recently hired Steve Lee – a former portfolio manager at Goldman. Lee’s hiring comes shortly after the company also welcomed former Godman vice presidents Elizabeth Ralston in February, and Michael Bucella in January.
Earlier today, Adam White, the vice president and general manager of Coinbase, indicated that the exchange is also shifting its focusing heavier on targeting institutional investors during an interview with CNBC. Mr. White said, “We think this can unlock $10 billion of institutional investor money sitting on the sideline. We’re seeing a rapid increase in attention awareness and adoption in the cryptocurrency market,” adding that Coinbase is “absolutely here to serve institutions.”
Do you think that 2018 will produce YTD losses or gains for cryptocurrency hedge funds? Share your thoughts in the comments section below!
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