Crypto funds nosedive 43% in 2018: report
Digital currencies have experienced intense volatility since prices peaked in December last year.
New data released this week shows cryptocurrency funds have suffered a significant fall from grace since the beginning of the year, highlighting the extremely speculative and volatile nature of these unseasoned assets.
The Barclay Cryptocurrency Traders Index, composed by BarclayHedge – a US-based investments portfolio management company – measures the average return of all cryptocurrency programs in the Barclay database.
The statistics reveal that in January 2018 cryptocurrency funds lost 11.63%. In February, the funds fell further, down 9.04%. March saw the worst declines, as the digital currency funds slipped again, tumbling by 29.15%.
Year-to-date, the estimated performance of BarclayHedge’s cryptocurrency funds is currently -43.05%.
The index is simply the arithmetic average of the net returns of all the programs that have reported that month. There were between 12 and 19 different funds available for evaluation during the first quarter of 2018. These funds trade bitcoin and other alternative cryptocurrencies.
In early December 2017, the largest U.S. options exchange, CBOE, launched bitcoin futures trading, offering investors their first opportunity to bet on whether the leading cryptocurrency’s value will rise or fall over time.
“Within days of the launch of bitcoin futures, bitcoin rose to its all-time high of just under $20,000 on December 18 last year. Today’s prices are just over $8,000,” BarclayHedge president and founder Sol Waksman said in a recent statement. “Folks have their opinions, but no one really knows if it’s a bubble or a correction.”
Comparative data sources
Autonomous NEXT – a UK-based fintech practice within independent firm Autonomous Research – which tracks 251 cryptocurrency funds, suggests that there is “a bear narrative in the air about ICOs and cryptocurrencies”.
“It starts out by suggesting that last year was a bubble around bitcoin, that many unscrupulous parties tried to jump on the bandwagon and take naive investors’ money. This spilled out in the fintech, crypto and public markets… And on top of this, regulators across the globe are recognizing initial coin offerings for what they are – unregistered securities offerings from unlicensed institutions,” researchers said in a Q1 review report.
However, Autonomous NEXT doesn’t agree with this line of thinking. Analyzing $1 million + initial coin offerings (ICOs) over the first three months of 2018, the company witnessed $3.5 billion worth of capital flow into tokens.
“Now, there is some underlying slow down relative to November and December of last year, and the number of projects starting fund-raising in March is lower. Some high profile companies are choosing to airdrop instead of ICO. But at a high level, the crypto economy is going to be far bigger this year than last year,” the firm said.
An ICO is when a company sells a new cryptocurrency coin to the public for the first time. It’s designed to spread the new currency widely and make sure it has plenty of investors and to encourage further trades.
You can learn all about different exchanges, understand exactly how to buy and sell cryptocurrencies, calculate your taxes, discover digital wallets to hold assets and explore a list of all the alternative coins on the market.
- Craig Wright: Tether is a criminal money laundering system
- Dr. Craig Wright explains the origins of Bitcoin – Full interview
- David Kleiman, Hal Finney and others helped create Bitcoin, says Dr. Craig Wright
- Cryptocurrency: Why all eyes are on eToro’s USA launch
- Bitcoin weekly price analysis 28 August: Token’s value soars in face of ETF rejections