Cryptocurrencies have grown by a very large amount during the year of 2017 and so far in 2018, but the real winner in the market continues to be that of hedge funds related to the crypto industry. The industry on cryptocurrency may have become incredibly popular amongst individual investors around the world, but the institutional investors throughout have been leaning more towards investing in hedge funds relating to the cryptocurrency industry instead of the individual cryptocurrencies.
One of the main reasons that these institutional investors have refused to put their money into the individual currencies lies in the fact that they are relatively unstable. These coins have become very speculative and risky in their nature, which makes them difficult to predict. Many investors also believe that the entirety of the market is a bubble, which doesn’t help the reputation of cryptocurrency. This is where the idea of cryptocurrency hedge funds come in. The hedge funds are able to give investors a broader and more secure way to invest in cryptocurrency, without being subject to the individual high levels of exposure of the coins.
A new report has stated that out of nine hedge funds related to the cryptocurrency world, the average rate of return was around 1,167%. This is a massive amount considering many investments in the cryptocurrency world are subject to the aforementioned high level of volatility. For comparison, hedge funds throughout the world in other sectors only brought in around 9% return during the past year. With bitcoin alone gaining almost 1,500%, it seems like a smart idea to take a look at these new versions of crypto investments. The hopes are high that as the market is able to stabilize, more and more investors will be able to come into the space.