The 2020 Crypto Hedge Fund Report,printed on May 11 by PwC and Elwood Asset Management Services Ltd., mentioned that cryptocurrency hedge funds”>hedge funds belongings beneath administration doubled in 2020.

According to the survey, whole belongings beneath administration in crypto funds”>crypto funds grew from $1 billion in 2020 to greater than $2 billion by the tip of 2020. The common per fund additionally doubled, leaping from $21.9 million to $44 million.

Correlation with Bitcoin market

The examine discovered that crypto fund launches are extremely correlated with the value of Bitcoin. When bitcoin worth spiked in 2020, extra funds have been launched. While the market slid in late 2020, new fund launching confirmed a material decline.

The report exhibits that of crypto hedge funds portfolio, 97% embrace Bitcoin buying and selling, adopted by 67% utilizing Ethereum. XRP and Litecoin have been within the portfolios of 38% of funds.

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Almost 90% of the crypto hedge funds traders surveyed are both household workplaces or excessive web price people, with few crypto methods attracting foundations, venture-capital funds or pension funds, in keeping with the survey.

Fund efficiency

The survey recognized 4 essential cryptocurrency hedge fund methods. The commonest is quantitative, or funds taking an method to the market in both a directional or a market-neutral method. It dominates the crypto fund house, being the technique of 48% of funds.

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However, the report got here with a caveat: The outcomes have been offered by fund managers themselves, and werent verified by an impartial fund administrator or different third celebration. There could possibly be additionally vital survivorship bias, the report defined:

The median crypto hedge fund performance was -46% in 2020. However, the median 2020 year-end performance of the funds that are included in this years report is 74%. This provides very clear evidence that funds that significantly underperformed during the previous year had to shut down.

As Cointelegraph reported beforehand, crypto funds had grow to be the engine powering the expansion of the crypto business.