The Story Behind the Explosive Growth of Crypto Funds

The explosive growth of crypto funds is a compelling story, especially when you consider that the concept has only been around for six years.

Compared to the 224 funds launched in 2017, 2018 showed unprecedented growth as 239 new crypto funds entered the fray.

According to proprietary research by Crypto Fund Research, there are reasons to believe that the crypto fund industry will continue to make strides, even as the crypto market recovers from a grueling bearish run.

As expected, the rise of crypto funds has directly impacted the crypto space, with several talking points trailing its emergence as a crucial part of the crypto economy.

Crypto funds are typically crypto hedge funds or venture capital fundsAccording to the same research, the 812 crypto funds presently operating across the world comprises of 369 crypto hedge funds and 421 venture capital funds, while the remaining are either crypto exchange-traded funds or private equity funds.

Crypto funds are not as big as their traditional counterpartAlthough crypto funds are on the rise, a PwC and Elwood joint 2019 report shows that over 60% of existing crypto funds have assets under management that is less than $10 million.

Crypto funds outperform BitcoinIt is not every day you see hedge funds outperforming their benchmarks.

The data from CFR Crypto index is more impressive when considering that crypto funds lagged behind many of the single digital assets performance in 2017 and overtook the market at a time when many feared the worst - the bear market.

Crypto funds and bear market The gruesome effect of 2018's bear market - after the leading cryptocurrency's price hit record highs at around $20,000 per coin - would have crippled the development of the crypto space if not for the unwavering optimism of crypto funds.

America is still home to a large percentage of crypto fundsAccording to PwC and Elwood's joint 2019 crypto fund report, 64% of crypto funds are based in the United States.