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Satoshi&Co Daily Crypto Newsletter #55


Satoshi&Co Daily Crypto Newsletter

November 22 · Issue #74 · View online
ZPX | Satoshi&Co Newsletters

The asymmetric return profile of cryptocurrencies has attracted fund managers adhering to a range of investment strategies, from ecosystem funds to quant/AI funds. New fund launches exploded from a meagre 29 in 2016 to 268 in 2017 and 143 in 2018 so far. Liquid Venture funds account for about 50% of fund launches in 2017 and 2018.
Source: Autonomous Next
Source: Autonomous Next
The prolonged bear market of 2018 has significantly eroded the returns of crypto-focused hedge funds, especially those that have launched recently. With prices down 80% since the beginning of 2018, and more than 95% in some cases, a majority of hedge funds are seemingly on the path to closure, without even celebrating their first anniversary. In this post, we look at Q3 returns of crypto hedge funds which look better than the YTD returns as BTC and other cryptos kept moving sideways throughout the quarter.
Source: Vision Hill Research
Source: Vision Hill Research
Only quantitative funds managed to post positive returns for the quarter with a median return of 2.5%, but these however failed to beat Bitcoin’s 3.5% return for the quarter. Average returns for hedge funds stood at -8.5% for the third quarter. Among the passive funds, Bitwise Hold 10, Blectchley20 and Galaxy posted -9.2%, -33.9% and -11.1% respectively, with all of them failing to beat BTC.
It is indeed going to be a chastening moment for the majority of crypto fund managers; expect a number of these managers to shut shop, recoup what they can from the markets and return them to LPs and try and figure a way back with a clean slate in a few quarters!
It must be mentioned here that the 108 Token index (a product from ZPX, the same parent company that produces this newsletter) actually managed to beat crypto returns through its lifetime, outperforming BTC by 16%. But hey, we told you it would.
Meanwhile in Crypto Wonderland....
“Silvergate Files for IPO”
California-based Silvergate Capital is preparing to go public to raise $50 million in an initial public offering (IPO). The company has applied to list its shares on the NYSE and to use proceeds to funds its organic growth and for “general corporate purposes, which could include repayment of long-term debt, future acquisitions, and other growth initiatives”.
“3 Key Reasons for Sell Off”
Chris Burniske, a Placeholder Management partner, suggested that the US stock market retracement, sell-off of Ethereum, and the Bitcoin Cash hard fork were the three major factors behind the recent crypto wipeout. According to Burniske, the abrupt drop in the prices of major stocks and equities has led investors to clean up their portfolios, eliminating high-risk selections like crypto.
“Bakkt Delays Launch”
Kelly Loeffler, CEO of Bakkt, has revealed that the startup is now targeting 24th January next year as its inaugural day in business. This announcement comes after ICE noted that the platform would launch its physically-backed Bitcoin futures contract on 12th December. Loeffler explained that a delay would be in order to ensure that Bakkt’s clients and partners are adequately prepared for launch, given the interest shown in the platform.
“Bitcoin is Crypto’s Amazon”
In an interview with CNBC, Lou Kerner, a partner at venture capital firm CryptoOracle, compared the current slump in crypto prices to the dot-com burst in the early 2000s. Kern further stated that strong coins should be viewed like the big companies that came out of the dot-com bubble, using the example of e-commerce giant Amazon.
Crypto Twitter Pick
Nik Bhatia
Bitcoin is a commodity. Lightning is an app that allows you to use this commodity in a currency-like way.
What We Are Reading / Listening To
Overnight Performance of Top 10 Currencies
In addition to this daily newsletter, you can find more stuff to read at our news and research portal, our crypto index token and our upcoming relayer.
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