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Global Cryptocurrency Fund Development Trend Income Analysis and Forecast


Global Cryptocurrency Fund Development Status, Development Trend and Income Analysis Forecast

 Recently, the explosive growth of crypto asset funds, which have risen for more than six years, seems to be a boost to the blockchain industry. Today, crypto asset funds are like catalysts for the blockchain industry, driving crazy business opportunities sprinting madly. From 224 new funds in 2017 to the unprecedented launch of 239 in 2018, the investment engine for crypto assets seems to be eternal Non-stop.
World Cryptocurrency Fund Development and Trend Income Analysis Forecast
 

There are a total of 812 crypto asset funds in the world, including 369 crypto hedge funds and 421 venture capital funds. The remaining part is ETFs or private equity funds =. There is a concept that VC's multiple choice of fund models has created an excellent incubation platform for blockchain, so VC's creation of crypto asset funds for blockchain is a new trend now. For hedging investments, crypto assets effectively maximize the diversification of investment portfolio risks, especially based on the characteristics of crypto assets with high volatility. For example, some volatility options have allowed many hedging investment institutions to successfully establish a global A low-relationship portfolio with a recession. Most risk-averse investment institutions use long-term investment strategies to face crypto assets, including the issuance of tokens and incubation of innovation and entrepreneurship. This is similar to VCs.

Crypto Asset Fund

Although the crypto asset fund industry is booming, according to related reports, more than 60% of the fund's operating amount is less than 10 million US dollars. In other words, these hedge funds are all mini companies, that is, the entire company has no more than five It is composed of people, but manages funds with an amount of more than 50 million.

Crypto Asset Management Amount

    It can be seen that the crypto asset fund is far less than the amount managed by traditional hedge funds, and the entire crypto asset fund only accounts for about 1% of the total hedge fund management amount.

    It is difficult to see that the return on investment of hedge funds exceeds its target index in the traditional industry, but the blockchain industry has done it. The traditional hedge fund investment method looks old and outdated under decentralized digital finance. In 2019, the average profit of investing in the bitcoin market was 100%, but counting 40 crypto asset hedge funds, their returns were 1400%.

    What's more interesting is that when the bull market was booming in 2017, the return rate of crypto asset funds grew slowly compared to general digital asset investments. However, when the bear market that everyone feared came in 2018, crypto asset funds dominated the market. Of course, the bear market will lose money for any kind of investment, but compared to Bitcoin's return of -96%, crypto assets' -46% return is a victory.

    After the bear market in 2018, venture capital analysts began to look for promising and innovative blockchain projects in the low-price market. It is their help that has made the crypto asset market's comeback after this heavy hit. Much simpler.

Annual crypto fund issuance

 Cryptocurrency funds have experienced batch failures in 2019. As of December 25, 2019, the total market value of the global cryptocurrency market was $ 192.556 billion, down 76% from the highest value of $ 811.8 billion in 2018. As the bear market continues, more than 70 cryptocurrency funds globally will fail in 2019. In terms of quantity, the number of cryptocurrency funds in 2019 has dropped from 284 in 2018 to 140, a decline of more than 50%. A total of 269 venture capital investments have fallen to $ 1.5 billion, a decrease of about 40% year-on-year, and the number of transactions has also decreased by 60%.

Changes in the number of cryptocurrency funds

The growth of cryptocurrency fund assets in 2019 is relatively stable. The change in assets stems from two main factors: the launch of cryptocurrency funds and the appreciation of underlying assets. Therefore, due to the obvious increase in the value of basic assets in the first half of the year, and some cryptocurrency funds that have performed relatively well in 2019, although the number of cryptocurrency funds has declined in 2019, the overall growth has been relatively stable, while the value of basic assets has declined in the second half of the year. Therefore, the growth rate of assets has slowed down significantly.

Changes in cryptocurrency fund assets


    Most cryptocurrency funds have small assets. Compared with traditional VCs, most cryptocurrency funds are small in scale. Half of the funds manage less than $ 10 million in assets, but there are also projects such as GrayScale that have more than $ 100 million in scale.

Cryptocurrency Fund Assets

 But cryptocurrency funds such as Grayscale have grown rapidly. Among them, the assets invested by Grayscale, the world's largest cryptocurrency investment fund, have changed from complex to simple. Simple, passive, and low-cost structures have increased the number of single-asset investment instruments. the result of. In the third quarter of 2019, Grayscale Bitcoin Trust Fund experienced the largest quarterly capital inflow ($ 171.1 million) in the product's 6-year history.

 In addition to Grayscale, there are still many cryptocurrency funds that have maintained rapid development. The top ten active cryptocurrency funds in 2019 include DigitalCurrencyGroup, CoinbaseVentures, GalaxyDigital, NGC, Distributed Capital, PanteraCapital, PolychainCapital, DragonflyCapital, BlockchainCapital and ArringtonXRPCapital.

Top 10 active funds and their portfolios in 2019

Interestingly, all funds other than GalaxyDigital are either keen on investing in regional exchanges (South America, Europe, Middle East) or investment transaction related services. This direction has become the first choice for active investment institutions in 2019. Outside of exchange or transaction-related services, wallets, open financing platforms, and blockchain game studios are popular investment categories that follow closely behind.

Mix of categories of inverstments among Top 8 investors

Currently, more than half of the world's TOP10 cryptocurrency funds are concentrated in the United States. Among them, PanteraCapital, PolychainCapital, ArringtonXRPCapital and other crypto funds that have performed well in 2019 are concentrated in the United States.

Distribution of the top ten active funds in 2019

Data source: public information collation

    The performance of cryptocurrency funds is also significantly better than that of cryptocurrencies, and there are differences with traditional funds. Cryptocurrency funds have a shorter life cycle, their portfolios outperform the performance of most cryptocurrencies, and far exceed the performance of the S & P 500, but the scale is relatively large. Small and inexperienced. Among them, the CFR CryptoFundResearch (CFR) tracks more than 40 crypto funds through various strategies, mainly hedge funds, even if Bitcoin was in January 2017 to

    During June 2019, it climbed about 1000%, the crypto fund also increased by more than 1400%, and the S & P500 index increased by only 35%. In 2018, Bitcoin lost nearly 75% of its value, however, the CFR Crypto Fund Index "only fell" by 33%.

    Cryptocurrency Fund, Cryptocurrency (Bitcoin), and S & P500 Yield

Data source: public information collation

    In 2019, traditional fund giants from all sides also began to enter the market. Among them, American mutual fund giant Vanguard cooperated with NasdaqVentures-backed blockchain startup Symbiont to establish a trading platform. According to reports, the platform has been operating normally and completed the first transaction. Fidelity Fund's cryptocurrency funds have also begun to serve institutional clients extensively, attracting large amounts of funds to settle in. In the future, it may help cryptocurrency funds and institutional investors to store crypto assets more securely. Coinbase established CoinbasePrime in 2019, spanning asset management, venture capital, and inclusive finance, and may provide margin financing services in the future, which has attracted USD 20 billion in risk funds. In addition, two US pension funds with total assets under management of $ 5.1 billion invested heavily in a consistent $ 40 million fund established by MorganCreekDigital. The fund focuses on crypto asset investment and has a strong sense of risk aversion in pension funds. This capital injection also represents a conservative financial institution Began to accept crypto assets as a way to hedge hedges.

Development Trend and Income Forecast of Crypto Asset Funds

 1. Institutional investors' interest in cryptocurrencies will continue to increase

A May 2019 survey by Fidelity investment showed that 47% of 441 US institutional investors "considered digital assets as an innovative technology product." The survey also showed that more than 70% of the respondents are optimistic about digital assets, and 40% of the respondents said that they are open to investing in digital assets in the future.

 It is expected that with the development of Facebook-led Libra and the central bank's digital currency that may adopt blockchain technology, as well as the development of derivatives on licensed exchanges such as Bakkt and CME, in 2020, institutional investors will Interest in digital assets will continue to increase.

In the trend of digital asset development in full swing, the digital asset exchange, as its indispensable platform, will have the following development trends:


    2. Revenue Forecast of Crypto Asset Funds

 From experience, the profit cycle of a risk fund is 52 months, and the return of the first year will be three times that of the fifth year. It can be very optimistic to predict that the crypto asset fund is still in its initial stage. The age is about 16 months, so it can be guessed that now is the main profit cycle of crypto asset funds, and it is time to get rich returns.
Bitocin and crypto world


    The future of the U.S. vs. China

 Generally speaking, small hedge funds usually do not become the focus of much attention, but crypto asset funds are not. The US Securities and Futures Agency is preparing regulations for token issuance and token issuance. Token issuance is tightly linked, so they face tougher regulations than traditional hedge funds. For example, Pantera Capital of the United States faced a high fine for investing in the issuance of tokens at the end of 2018. Relevant institutions in the Chinese market predict that next year, the number of China's crypto asset hedge funds will surpass the United States as the largest country, and relevant regulations are also in preparation for implementation.

    Hedge fund competition is fierce. Whether it is a hedge fund or a diversified business project, crypto asset funds have been affirmed by a group of financial people. From this we can see that the prospect of the blockchain market is very clear. As far as investment status is concerned, crypto asset funds also belong to a “strange investment”, which is a high-risk and high-yield. Perhaps after a few fluctuation cycles, crypto assets will become another unique type of stocks, bonds and foreign exchanges. Investment Products.



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