Hedge funds investing in cryptocurrencies are seeing returns fall, with digital coins down by 35 percent so far this year.

According to the Financial Times, U.S. analytics firm Hedge Fund Research (HFR) reports that global hedge funds investing in cryptocurrency and its technology have posted negative performance in four out of five months this year.

The negative returns come as bitcoin has lost more than half its value this year, with its market cap going from nearly $300 billion to just over $100 billion. In addition, concerns over tougher regulations have led to price volatility.

“I expect the crypto markets to remain volatile for the foreseeable future,” said Henri Arslanian, FinTech and cryptocurrency lead for Asia at PwC. “Whilst retail investors may see volatility in the crypto markets as a downside, many crypto funds see it as an opportunity,” he said, adding that the “long term positive impact of the number of institutional players entering” cryptocurrency investment was more important than short-term price fluctuations.

Another factor could be that a number of crypto trading venues have also suffered from high-profile hacks. Earlier this year, it was reported that Ernst & Young found that over 10 percent of funds raised through initial coin offerings (ICOs) fall victim to hacker attacks. Of the total $3.7 billion in funds raised at the time, approximately $400 million had been stolen. The most common hacking technique was phishing – and hackers steal up to $1.5 million in ICO funds per month, the report found.

There was some good news this week: The Securities and Exchange Commission’s (SEC) leading authority on bitcoin, cryptocurrency and ICOs ruled that some well-known cryptocurrencies like bitcoin and Ethereum are not securities.

However, the coins offered during ICOs are very likely entirely — or mostly — securities.

“Central to determining whether a security is being sold is how it is being sold and the reasonable expectations of purchasers,” William Hinman, head of the Division of Corporate Finance for the SEC, said in a speech.