The bearish cryptocurrency market persisted in the first three months of 2018, with digital currency-focused hedge funds suffering massive losses and posting their worst performance in March.
Data provider Hedge Fund Research reported that both of its indices tracking the performance of fund managers invested in blockchain and digital currency sustained double-digit losses in the first quarter.
The HFR Blockchain Composite Index slumped 46%, while the HFR Cryptocurrency Index lost 45.34% during the same period.
BarclayHedge’s Cryptocurrency Traders Index also dropped significantly over the last three months and was down 43.1%. The Barclay Cryptocurrency Traders Index fell 29.2% in March, the highest monthly drop so far this year.
Sol Waksman, founder and president of BarclayHedge, said:
“Within days of the launch of Bitcoin futures, Bitcoin rose to its all-time high of just under $20,000 on December 18 last year. Today’s prices are just over $8,000. Folks have their opinions, but no one really knows if it’s a bubble or a correction.”
According to Waksman, the launch of Bitcoin futures trading by CME Group (NASDAQ:CME) and Cboe Global Markets contributed to the exponential growth of the cryptocurrency space. He said:
“The ability to trade Bitcoin futures on exchanges such as CME and Cboe, which are respected worldwide, provides a much-needed level of transparency, investor safety, and credibility to the price–discovery process and creates a level of institutional legitimacy that is crucial for growth in this sector.”
Worst is over
Over the past few days, Bitcoin and other digital currencies have been showing signs of revival. As of Thursday, Bitcoin was trading at $8,197, data from CoinMarketCap. The cryptocurrency closed at $8,142 on Monday.
Pantera Capital, a cryptocurrency-focused hedge fund which reported a 25,000% gain in 2018 through its Digital Asset Fund, expressed optimism that the bearish market was over and a steady recovery would follow in the days ahead.
Pantera Capital co-chief investment officer Joey Krug was quoted as saying:
“This was a really rough month for the Digital Asset Fund and the space in general. We're in a market with around 100 percent annualized volatility and this month was the worst month in our model's 27-month history.”
This article appeared first on Cryptovest