Today Morgan Stanley estimated that $2 billion has been invested with hedge funds focusing on cryptocurrencies in 2017. These are through specialist hedge funds.
This estimate is based on data from the consultancy Autonomous NEXT as well as Morgan Stanley’s own research.
The Bitcoin has surged over 1,500% against the dollar in the whole of 2017, this spurred huge amounts of interest from both institutional and retail investors. There was a list sent by HedgeFundAlert.com in November that there were details of over 120 Cryptocurrency-specific hedge funds.
The Hedge fund data provider HFR last week started two new indices, the HFR Blockchain Composite index and the HFR Cryptocurrency Index, meant to track investment in the space. These two indices track only around 20 products but will have the data stretching back to 2015. This index has annualized performance of 292% since inception and has rose to 1,641% in 2017 through to November.
Kenneth J. Heinz, President of HFR, said in a release announcing the new products: “Investor interest in funds offering exposure to Blockchain technologies and Cryptocurrencies has surged in recent months as these innovations continue to move towards the mainstream and generate compelling opportunities for investors, portfolio managers, traders and other market participants.”
But he cautions that the area is “involves substantial volatility and risks, both real and structural.”
Early in the month, the Exchange operators Cboe and CME Group started bitcoin futures contracts, which give more traditional investors access to what JPMorgan has called an “Emerging asset class” The trade on both exchanges have been pretty slow so far.
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