Popular Cryptocurrency Hedge funds in 2019
In a previous article published by Cryptoknowmics.com, Bitcoin’s potential to rake in lots of profits is what attracts investors. However, the issue of risks in an unregulated environment such as the crypto space is the main limitation for Institutional investors. To most, crypto markets are only but speculative risks, wishful thinking at best.
But isn’t it too early to judge, given that cryptocurrencies are only a decade old and have no backing from any government-issued stable coin. Despite the fact, Cryptocurrencies might not be able to attract masses of institutional investors, there has been massive interest from another front. Hedge fund investors are bargaining on the power of bitcoin. It seems thereof, they are all heading this way.
What Are Hedge Funds?
Hedge funds are usually, mutual funds pooled together in a limited partnership, that is ultimately limited by high risk, but speculative means to acquire extra-large profits. It is worth noting that all investments carry risks, all investment are mere speculations. However, when it comes to hedge funds, the risks are more than the average mutual fund or pension fund.
Hedge funds are known to be risky, volatile and highly speculative. Hence, in as much as you could earn lots of profits within a short duration of time; it’s also possible to lose almost every bit of your investment capital.
Unlike traditional investments, some analysts have compared crypto trading more like gambling. In the broader sense, anything could happen in a crypto market situation like Ethereum dropping by 20% from a high of $380 to a mere $170 support level. Or rather, the Bitcoin plummets from an all-time high of $20, 000 to a low almost the half.
It, therefore, means that you should speculate loses as much as you expect gains. However, unlike gambling, there calls for the need to investigate market trends, previous performances, and possible forecasts before making an investment. This places the possible risks on your radar.
The hype surrounding the cryptocurrency market could lead to anything. Bubbles or crashes. A hedge fund in the crypto space could, therefore, make huge gains within a short time; or better yet, make huge losses within that short amount of time. Let’s take a look at three of the most popular cryptocurrency hedge funds on offer today.
CoinCapital invests hedge funds in several cryptocurrencies, Initial Coin Offerings, and blockchain startups. CoinCapital manages a diverse portfolio of up to 40 different digital currencies such as Bitcoin, Litecoin, Ripple, Ethereum and Dash. These hedge funds boast a successful track record with an excellent team experienced in marketing, sales, and financial background. This hedge is however limited to only people with a net worth of $2.1 million.
BitcoinReserve operates a cryptocurrency hedge fund known as Arbitrage fund. The fund operates across various crypto exchanges so as to correct market inefficiencies. This is an amazing strategy noting that different assets will fetch different prices on different exchanges. Hence by taking advantage of these inefficiencies and the price differentials, the arbitrage fund gains profits. It is worth noting that the BitcoinReserve is the most accessible hedge fund for average people.
Pantera Capital is managing a portfolio worth $700 million that cuts across five cryptocurrencies in two venture funds. To be eligible, one must invest over $ 100, 000. Hence, making this fund an amazing alternative for institutional investors or investors with an extremely high net worth.
Before staking your investment in a hedge fund; ensure that the funds you are staking are only but speculative and note that a hedge fund will entail a very high amount of risk.
About The Author
Richard M AdrianBlockchain Analyst with a demonstrated history of working in the writing and editing industry. Skilled in WordPress, Editing, SEO Copywriting, Copy Editing, and Blog Marketing. When I am not writing, analyzing bulls/bears - I will be listening to music, reading a thrilling novella or hiking. Email me at Richardmadrian@gmail.com - And we could talk about anything - business or dragons.
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