Crypto, Blockchain Focused Hedge Funds Down 50% H1 2018 - HFR Report
Virtual coin losses affected blockchain and crypto-focused hedge funds which dropped nearly 50% in the first six months of the year.
Blockchain and cryptocurrency funds have lost nearly 50% in value since the beginning of 2018, sector data provider Hedge Fund Research (HFR) reported.
The HFR Blockchain Index declined 22% in June alone and by 49% in the first six months, while the HFR Cryptocurrency Index dropped 23% last month and a total 48% from January to June.
The drop in the blockchain and cryptocurrency benchmarks reflects the loss of value in major digital currencies. For the first six months of this year, Bitcoin (BTC) fell 54% to $6,385. BTC was trading at $6,404.51 at 2 a.m. UTC Wednesday, data from Coinmarketcap showed.
Since hitting an all-time high of $20,000 in December 2017, Bitcoin has been on the downward trend.
Across the industry, HFR said that hedge funds posted mixed performance last month amid growing tensions about trade-tariff negotiations, while the U.S. Federal Reserve raised interest rates and M&A activity remained strong. The HFRI Fund Weighted Composite Index (FWC) fell 0.46% for the month, topping declines European, Asian and global equities, as well as the Dow Jones Industrial Average.
"Trade-tariff equity volatility has increased concurrently with strong U.S. earnings at the same time that the U.S. yield curve flattened and the Fed increased rates, creating additional pressure on non-U.S. equities. These trade-centric macroeconomic drivers are likely to accelerate through 2H18, inclusive of upcoming meetings between U.S. and Russia, contributing to a fluid environment and increased opportunity set for long/short investing across multiple asset classes globally. Funds which have demonstrated an ability to navigate this environment are likely to drive performance & growth in 2H18.", HFR President Kenneth J. Heinz said.
Surprisingly, despite the decline in blockchain and cryptocurrency-focused hedge funds, data showed that crypto funds are the fastest growing segment in the industry.