Investors Are Pouring Money into Crypto Hedge Funds

Author: 
Michael R.
Date: 
November 07, 2018
Read time: 
2 minutes
Cryptocurrency
Hedge Funds
Future

Over the past 12 months, the cryptocurrency market has lost over 70% of its value. Despite this drop, accredited investors and institutions continue to invest more capital into cryptocurrency focused hedge funds and other investment vehicles

Over the past 12 months, the cryptocurrency market has lost over 70% of its value. Despite this drop, accredited investors and institutions continue to invest more capital into cryptocurrency focused hedge funds and other investment vehicles

Grayscale Investments, owned by Barry Silbert’s Digital Currency Group, has managed to rake in over $300 million this year despite the current bear market. Most of the inflows are from hedge funds, pensions, or endowments. In a recent interview with CNBC, Michael Sonnenshein the managing director of Grayscale Investments stated that the 70% drop has not hurt their capital inflows. "Bitcoin prices doing nothing but go down the entire year has not deterred our existing clients from putting more capital to work."

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Better yet, Grayscale is not the only crypto investment vehicle to do well this year. Other firms, mainly hedge funds such as Pantera Capital and Ikigai Asset Management have raised over $100 million from investors wishing to invest in this new asset class. Rather than being discouraged, most investors view this time as an opportunity to invest cheaply.

The Future is Bright

History shows that after each correction in the market, it rebounds with new highs. Over the 10 year history in the cryptocurrency market, we have seen multiple corrections causing the market to dip well over 50% in value. In the end, new investors seem to flood in causing the market to rise with a vengeance. It is often said that the best way to invest is to follow the lead of large investors - if they are investing in this dip, then it is a good sign for the future.

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