A total of 97 crypto funds have shut down this year
Bloomberg News reported that out of the more than 700 crypto funds worldwide, 97 have shut down this year. This data comes from Swiss investment adviser 21e6 Capital AG.
Funds underperformed bitcoin’s gain of 83.3%
Although the funds returned an average of 15.2% in the first half of the year, they still underperformed bitcoin, which saw a gain of 83.3%. One reason for this underperformance is that many funds were holding more cash than usual due to the industry turmoil of last year.
Struggle to find new partners for banking services
Some funds have been facing difficulties in finding new partners for banking services. Maximilian Bruckner, the head of marketing and sales at 21e6, stated that regulatory uncertainties surrounding banking partners and fund administrators have caused many funds to slow down their operations.
Directional funds performed well, but underperformed bitcoin
According to Bruckner, while directional funds performed well, they still underperformed bitcoin. On the other hand, discretionary crypto funds did not face the same regulatory issues and were able to continue their operations without disruption.
Quantitative funds held down by “choppy” markets
Quantitative funds were negatively affected by volatile markets, which led to lower performance. Despite a slight improvement in investor confidence, fund inflows and launches do not indicate a full recovery in sentiment, according to Bruckner.
Hot Take: Crypto funds face challenges in a volatile market
The shutdown of 97 crypto funds this year highlights the challenges faced by these funds in a volatile cryptocurrency market. While some funds have been able to perform well, many have struggled due to regulatory uncertainties and difficulties in finding banking partners. As the market continues to evolve, crypto funds will need to adapt to new challenges and find ways to outperform bitcoin.
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