Bulls are on parade as hedge funds pour money into bitcoin-related projects and products. Traditional hedges have been outperformed by cryptocurrency funds in 2017, and the phenomenon has turned into a full-fledged feeding frenzy. New indices are popping up to track it all. Ecosystem stalwarts Bitgo and Bitpay expect new rounds of funding, and well-over 100 such funds are now dedicated to cryptocurrency.
Crypto Hedge Funds Up 1,500% in 2017
Hedge funds as a whole are up a nice inflation-beating 7.5 percent as the year finishes. When placed against crypto-related industry products, legacy financial professionals are scrambling to up their game. Hedge Fund Research (HFR) President Kenneth Heins tells Lindsay Fortado: “Investor interest in funds offering exposure to blockchain technologies and cryptocurrencies has surged in recent months.”
Citing “the explosive growth in investor interest in blockchain technology and cryptocurrencies,” the company created “two new indices, the HFR Blockchain Composite Index and the HFR Cryptocurrency Index, the first family of indices designed to capture performance of hedge funds investing,” its website touted.
HFR’s Blockchain index shows “a meteoric surge of +1,522 percent in 2017 through November,” while its Cryptocurrency variation “has surged +1,641 percent in 2017 through November,” the company claims. “HFR began tracking the first cryptocurrency hedge fund in 2013, though interest and growth in this area has surged in 2017 as a result of stratospheric price increases and broad proliferation of new coins via ICOs, as well as launches of listed futures contracts,” the company notes.
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