PwC: cryptocurrency hedge fund assets reach $ 2 billion in 2019

According to the report of the consulting company PwC and Elwood Asset Management, the volume of assets under management (AUM) cryptocurrency hedge funds  doubled in 2019 to reach $2 billion.

PwC and Elwood Asset Management published a report,which stated that the total assets under management of cryptocurrency hedge funds doubled last year. At the end of 2018, the amount of assets was about $1 billion. The share of hedge funds with digital assets worth more than $20 million increased from 19% to 35% in 2019, the average volume of assets under their management jumped from $21.9 million to $44 million, and the median AUM grew from $4.3 million to $8.2 million.

PwC and Elwood divided cryptocurrency hedge funds into four categories, depending on the trading strategy.

• Hedge funds with long holding periods for investor assets. The median rate was at 40%, and the average increase was 42%.
• Funds with long / short positions (use hybrid strategies). The average and median growth of such funds was 33%.
• Funds focused on quantitative trading and working with liquid cryptocurrencies. The median increased by 30%.
• Funds using a combination of the first three strategies. Median growth increased by 15%.

According to PwC and Elwood, almost halfcryptocurrency hedge funds use “quantitative” trading, the remaining 50% of funds use other strategies. The firms added that the above data was provided by cryptocurrency hedge fund managers and has not been verified by third-party auditors.

Last year, 97% of hedge funds traded BTC, 67%- ETH, 38% - XRP and LTC, 31% - BCH and 25% - EOS. The report indicates that many hedge funds have shown interest in lightcoins despite the fact that its market capitalization is lower compared to other altcoins. About 56% of hedge funds traded in derivatives, 48% focused on short sales, 42% engaged in cryptocurrency staking, 38% provided loans.

48% of crypto hedge funds werecompanies for trust management of family capital and 42% — individuals with high income. No hedge funds mentioned pension funds as investors.

According to the cryptocurrency manager atHenri Arslanian's PwC, there have been many changes in the cryptocurrency hedge fund industry over the past 12 months. The introduction of additional regulatory rules indicates that more and more institutional investors are entering the industry.

"In the next few years, the industrycryptocurrency hedge funds will become even more developed. Institutional investors now have the opportunity to easily invest in the digital asset industry,” — Henry Arslanian said.

Last month, PwC presented another report, according to which, in 2019, funding for cryptocurrency firms decreased significantly.

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