Crypto hedge funds industry doubles and continues carve its piece of the pie from the global investment market. Assets under management rose to 2 billion in 2020 double from 2019 1 billion number.
Its all about Bitcoin
Most crypto hedge funds trade Bitcoin (97%) follow ed by Ethereum (67%), XRP (38%), Litecoin (38%), Bitcoin Cash (31%) and EOS (25%).
Multi-strategy vs Quants
Multi-strategy funds made the most returns (+40%). Quant funds made +30% so understandably almost half of the funds ran primarily quant strategies. So I suppose the jury is still out on this.
30 does it
Apparently you don't need an army of customers to run a hedge fund. 28 was the median number of investors in most of these hedge funds. 90% of their buyers are
family offices and high net worth individuals. Median spend is around 300k and average is 3.1 million.
First 10 million is the hardest
If you plan is to rely on just management fees then <10 million AuM is not going to cut it for you because thats only 200,000. Average size of crypto hedge fund is 6 people. A min of 30 million is needed to just even break even. So crypto hedge fund managers have to expand their horizons and create other sources of income. They are increasingly exploring business models based on staking and lending.
US leads the charge
Overwhelming majority of crypto hedge fund managers live in US. US, Cayman islands and England seem to have most of these funds. US and England for the same reason i.e. most of the capital lives here. Cayman islands because they have the best beaches.
Crypto continues to prove itself as an asset showing yet great sign of growth gauging from at doubling in AuM to over 2 billion dollars in 2019 from its 1 billion dollar 2018 per PwC.