According to a tweet by economist Tuur Demeester, “Hedge funds with crypto exposure exploding.” The article Demeester refers to says that there are more than 70 funds with such bets now coming up in the hedge fund pipeline.
The article also has a statement by Arthur Bell manager Corey McLaughlin:
“I’ve been in the hedge fund space since 1998, and I’ve never seen anything like it in volume of launches in a particular area. It’s just crazy.”
What is trendy among hedge funds is usually a sign of what vehicles have the best potential for quick ways to make money, without paying much attention to the exact sector the investment is betting on. The market for hedge funds is always changing since investment vehicles are always in flux and move like fallen leaves with the financial trends.
In recent months, the prices of cryptocurrencies have been on the rise, drawing attention to the market from hedge fund investors. Funds already invested in such currencies were considered edgy until they started showing nice profits as the market for Bitcoin and other similar currencies began to boom at the beginning of the year.
With prices and demand rising, managers want to cash in by creating new funds that link to cryptocurrencies. At the moment there are at least 70 funds coming up for investors to bet on Bitcoin and similar currencies.