9 big crypto hedge funds did not deliver on promises: what it means for the market

As suggested by financial observers, 9 hedge funds revolving around cryptocurrency have ceased to exist since December 2017. The decrease of the price of Bitcoin and other cryptocurrencies has not been good for business, the press implies. The lack of interest of institutional organizations aside from CME and CBOE has also played its part, experts suggest, and here one can independently prove this point by using the opposite example - Bitcoin has accelerated the pace of its growth right after the first messages on Bitcoin futures.

However, the same observer tells that the optimism of the general public towards blockchain and ICOs does not stop, and this statement can be directly confirmed by the recent measures imposed on a Chinese regular exchange to prevent market manipulations connected with blockchain-related branding and marketing.

Additionally, the closure of 9 funds means that the current common cryptocurrency hedge fund business model is inefficient and has to evolve, meaning that it is too premature to say about the complete fail of crypto hedge funds as a concept. The cryptocurrency world is suffering from inefficient enterprise models in the form of non-hedge firms too: the recent review of ICOs concluded that they are not as profitable as they were last year. They were made with the good market conditions in mind without any safeguard mechanism ensuring the success in case of the bearish sentiment among the investors.

Image courtesy of Shutterstock