How and why the growing popularity of cryptocurrency funds

The explosive growth of CryptoRandom looks very convincing, especially when you consider that this concept has existed for only six years. Today cryptophony become the engine of growing of kryptonyte. In comparison with 224 funds, which will be launched in 2017 and in 2018, has seen an unprecedented growth as the game entered 239 new organizations. Experts predicted that in 2019, the figure will be less. However, according to the analysis of Crypto Fund Research, there is every reason for the further growth of industry CryptoRandom on the recovery of the stock market.

As one would expect, the growth of CryptoRandom directly reflected in the cryptocurrency space with a number of abstracts indicates their important role in the cryptocurrency economy. First of all, cryptoforge is usually cryptocurrency hedge or venture capital funds.

Recall that a hedge Fund is an investment Fund whose purpose is profit maximization at a given risk or minimizing risk for a given return. It is a pool of investors ' assets, managed by professionals on their behalf.

Venture Fund is a risky investment Fund that is focused on working with innovative companies and projects. Venture capital funds invest in securities or shares of companies with high or relatively high risk in expectation of extremely high profits.

Accordingly, if we are talking about the cryptocurrency funds, they invest in cryptocurrency assets.

Share critobulus hedge Fund (in blue), venture capital funds (Navy) and private capital (green). Source: Crypto Fund Research

According to the above schedule on the basis of a study among 812 of cryptomundo, which now operate worldwide, 355 are hedge funds and 425 – venture funds. All the rest are cryptocurrency exchange traded funds (ETFs) or funds for direct investment. It can be argued that the inflow of venture funds has increased the financing options the blockchain startups, as now traditional among venture capital firms is a widespread tendency to launch blockchain-funds.

Of course, the growth and maturation of the cryptocurrency/blockchain sector attracted the attention of funds for direct investment. As for cryptocurrency hedge funds, then it’s all about maximising the investment opportunities offered by the volatile nature of the stock market. Therefore, basically it is a hybrid funds, investing in ICO and cryptocurrencies. That’s why they use long-term investment strategy.

That is, are about as traditional venture capital funds.

The contents

Cryptophony not as large as traditional funds

Despite the growing number of cryptomundo, a joint study by PwC and Elwood showed that more than 60 per cent of existing CryptoRandom assets under management (AUM) are estimated at less than $ 10 million. However, there are major cryptoforge with more than 50 million dollars to manage. At least two funds AUM are estimated at a billion dollars and even more.

However impressive as this statistic, it isn’t even close to the value of the assets controlled by traditional hedge funds. The assets of all CryptoRandom together represent only 1% of the assets of all hedge funds.

Cryptophony ahead on indicators Bitcoin

It’s not every day that you see how hedge funds ahead of your underlying asset. But the reality in the market of digital assets differs from the market for conventional assets, as indicators of CryptoRandom continue to exceed expectations. Index funds from cryptocurrency Crypto Fund Research, which includes more than 40 CryptoRandom exceeded the market growth of Bitcoin by 100 percent from January 2017 to June 2019. It speaks about increase of over 1,400 percent.

A comparison of the growth of Bitcoin (in yellow) and CryptoRandom (green). Source: Crypto Fund Research

CFR index data is even more impressive when you consider that cryptophony lagged behind that of many separate digital assets in 2017 and walked around the market, when many feared the worst – a bear market. However, this does not mean that investors didn’t lose money, but the drop CryptoRandom in 2018, 46 percent in comparison with the fall of Bitcoin more than 80 percent – is also a kind of success.

Cryptophony and bear market

The terrifying effect of a bear market 2018 – after the price of the leading cryptocurrency reached a record of 20 thousand dollars and fell down – could greatly harm the development of Cryptoprotected, if not for the unwavering optimism of CryptoRandom. Venture capitalists cryptocurrency and hedge funds used this period for finding and funding interesting blockchain projects. There is no doubt that without this funding development would come to a standstill.

Statistics new CryptoRandom years. Source: Crypto Fund Research

It is believed that the decisive factor profitability of investment funds is an experience. However, the hedge Fund industry is less true, according to a recent study by University of Loyola Marymount University (LMU). According to sources, indicators of hedge funds as they age is falling. The study says that the average age of traditional hedge funds – 52 months, and the yield in the first year of activities more than three times higher than in the fifth year. The median age of CryptoRandom from this index, CFR – 16 months. If you apply information from the study LMU, it can be assumed that the control of CryptoRandom now in the Prime of life, which helped them to generate fantastic returns.

Where most of CryptoRandom

According to a joint study from PwC and CryptoRandom Elwood in 2019, 64 percent of CryptoRandom based in the US. Other countries, where industry is booming cryptomundo, is a Cayman Islands, UK, Singapore. There is still Liechtenstein, Luxembourg and Australia. Apparently, cryptoforge mostly prefer cities, which are situated in the traditional hedge funds.

In the past the small size of many CryptoRandom were excluded from everyone’s attention. However, the situation changed as the Commission on securities and exchange Commission and other regulators around the world introduced requirements for ICO and licenzirovanie securities. And since cryptocurrency hedge funds are closely linked to licenzirovanie securities became more likely that their registration will be subject to more stringent requirements. Good example is the case cryptoanalytical firm Pantera Capital, which in December 2018, informed about possible compensations and fines for investing in the ICO, in breach of us securities legislation.

Statistics was (in purple) and unregistered (yellow) in SEC CryptoRandom. Source: Crypto Fund Research

In General, the typical crypto-currency, the Fund may be a hedge Fund or venture capital Fund. At the same time, cryptoforge not as large as traditional funds, and while not as important in the financial market. However, the average cryptocurrency hedge funds bypass on the efficiency of Bitcoin — the world-leading cryptocurrency. Cryptophony handled the bear market, as the immaturity of the industry continues to drive its impressive growth. A large percentage of CryptoRandom of the world is based in the US, and therefore regulatory uncertainty in this region remains an important topic that needs to be clarified. Of course, if we want kriptonyte improved further.

Look into our cryptcat of hontarovthat also trying to understand all the intricacies of the cryptocurrency sphere.

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