Bitcoin Madness Helps Crypto Hedge Funds Reap 1, 100% Gains
While most of the world’s institutional investors ,observed from the sidelines spil cryptocurrencies surged last year, a puny group of hedge fund managers piled ter.
Call them visionaries or just plain fortunate, but boy did they kasstuk the jackpot.
The nine cryptocurrency hedge funds tracked by , Eurekahedge Pte soared 1,167 procent spil a group te 2018, according to preliminary figures from the gegevens provider, which doesn’t disclose details such spil assets under management or individual comes back. While that trailed the 1,403 procent build up ter bitcoin, it cosily trounced the 8 procent comeback by hedge funds globally.
The numbers provide an early look at how professional traders are faring ter the world’s wildest investment boom. Even spil luminaries from Warren Buffett to Ray Dalio warn of a bubble and cryptocurrencies commence 2018 with losses, a growing number of wealthy individuals, family offices and institutions are looking for ways to build up exposure.
Hedge funds suggest investors more than just a wager on rising cryptocurrency prices, their strategies also include market making, early-stage equity investing and bitcoin lending. While those bets proved a haul on comebacks te 2018, they should help cushion funds against losses during market downturns.
Still, the products aren’t for everyone. Managers of the Altana Digital Currency Fund, which surged 1,496 procent last year after fees, warned clients ter a November presentation that they should only invest a fraction of their netwerken worth — an amount they can afford to lose. European Securities and Markets Authority Chairman Steven Maijoor said ter a Bloomberg Television vraaggesprek Tuesday that bitcoin investors “,should be ready to lose all their money.”,
Bitcoin slumped by the most since September on Tuesday, falling 12 procent at 9 a.m. te London, while rival cryptocurrencies also tumbled.
Here’s a closer look at the Altana fund and four of its peers that benefited from last year’s boom:
Altana Digital Currency Fund
Investment universe: Commenced te 2014, the fund buys cryptocurrencies te proportion to their global market value and adjusts holdings regularly based on sentiment and market opportunities, according to a presentation seen by Bloomberg News. It also earns Trio procent to 21 procent annualized rente from lending bitcoin to brief sellers.
2018 spectacle: The majority of its 1,496 procent comeback wasgoed from bitcoin’s build up. The fund outpaced the digital currency because of automated arbitrage, momentum trading and short-term, securitized bitcoin loans.
Key people: Lee Robinson, who co-founded London-based hedge fund Trafalgar Asset Managers, and previously worked at Tudor Investment Corp., is chief investment officer of the rock-hard. Alistair Milne is co-founder and CIO of the fund.
Market Neutral Liquidity SP-Institutional
Investment universe: Five cryptocurrencies, including bitcoin, ethereum, bitcoin specie, ripple and litecoin. A market-making fund, it seeks to profit from price differentials across different exchanges and markets, ,said Cedric Jeanson of BitSpread Group, investment adviser to the portfolio, which oversees more than $100 million. ,BitSpread makes money from its market-making activities, and doesn’t rely on directional bets. It trades about $1 billion of digital currencies a month, with more than Five,000 transactions a day.
2018 show: The portfolio made almost 54 procent since it began on May 9, or about 92 procent annualized, Jeanson said. Most of the 2018 comes back came from trading bitcoin, ethereum and bitcoin metselspecie. BitSpread had previously traded with only internal capital, using the same strategy.
Key people: Jeanson, who founded BitSpread te 2014, spent the earlier part of his career trading equity and credit derivatives at banks including JPMorgan Pursue &, Co. His last job wasgoed London-based chief operating officer at Nomura Holdings Inc.’s equity derivatives business ter Europe.
Silver 8 Vrouwen
Investment universe: Marketed spil a hedge fund focused on fintech, blockchain and machine learning, Silver 8 allocates money to digital assets and infrastructure. It also makes venture-capital investments te early-stage companies. It can take bullish and bearish bets on publicly-traded securities. The hard has bot investing ter digital assets since July 2015 and presently manages more than $300 million, said Jose Suarez, co-founder of Florida-based Silver 8 Capital.
2018 vertoning: The fund’s build up wasgoed estimated at more than 750 procent ter 2018, mostly due to bullish bets on digital assets. It has kept all venture-capital investments at book value. Cryptocurrencies such spil bitcoin, bitcoin specie and ethereum, spil well spil infrastructure-type investments, now account for the majority of its holdings.
Key people: Manuel Anguita wasgoed a macro hedge fund manager ,at Proxima Alfa Investments and more recently wasgoed a founding playmate of Aguila Capital, which focused on opportunities arising from the European debt crises. Suarez, the son of a former Latin American central banker, had earlier bot voorzitter of Walker Digital, the innovation laboratorium of Priceline.com founder Jay Walker.
Crypto Asset Fund
Investment universe: The fund has six share classes, four of them presently active. Among them, one permits all types of investments ter the crypto space, including currencies, tokens, tethers, and other related instruments. A 2nd share class mirrors a crypto index, a third lends fiat and cryptocurrencies on exchanges and the fourth engages te environmental, social and governance-related investments ter the crypto space.
2018 show: Estimated build up of 805 procent from inception on July 1 through December.
Key people: Tim Enneking is the San Diego, California-based managing director of Crypto Asset Management. He formerly founded and managed Tera Capital Fund, a fund of funds focused on eastern Europe, according to Crypto Asset’s webstek.
Global Advisors Bitcoin Investment Fund Plc
Investment universe: Bitcoin. Global Advisors (Jersey) Ltd. wasgoed originally a commodities hedge fund manager. Ter September 2014, it commenced what it describes spil the world’s very first regulated bitcoin fund. The fund can have a zero to 125 procent exposure. It trades bitcoin ,and products related to bitcoin, such spil the exchange-traded bitcoin products suggested by XBT Provider. It also lends and borrows bitcoin.
2018 show: Estimated comeback of about 300 procent. Ter late 2018, it had a limited nipt exposure to bitcoin, switching to a more market-neutral arbitrage treatment. It missed out on some of the gains late ter the year, said Daniel Masters, co-founder of Global Advisors.
Key people: Rigid co-founder Masters is a former head of JPMorgan’s global energy trading business.
For a spijskaart of cryptocurrencies on Bloomberg: VCCY