Crypto Funds Stopped Growing Like Trees As The Bulls Are Not Grazing There Anymore
By: Finrazor Team
Tags: Cryptocurrency, Crypto, Fintech, Blockchain, Finance

Does it remind you anyone? Oh, yes, it’s Michael Novogratz, who tries to guess the bottom every week. We’ll return to him a bit later.

It was 2017, crypto funds, showing extraordinary profits, were growing like trees in the forest. After a while, seasoned professionals also decided to join the party. Officially, in the summer of 2017 there were only 57 crypto funds, a year later, in the summer, there were a lot more — 225 funds. Some of them were founded by successful hedge funds with their own analysts and a lot of resources. Still, they show that they don’t know anything special about crypto, showing the same losses, as the whole market in general. They followed this buy’n’hold strategy that works well in a bull market when you can buy anything and you’ll get a profit eventually. Currently, the problem is in the market. The bulls are gone.

Pantera Capital are the smart guys. When we gossip about their 40% losses, we should not forget that we talk only about the new fund, that buys altcoins. Their oldest fund, founded 6 years ago, gave a 10,000% return on investments to its investors. That’s a pretty good result. Also, let’s point out that they started to invest before the hype when the bubble was relatively small. Now the bubble burst, but it doesn’t mean that it can’t grow even bigger after that. Most altcoins will die — many of them don’t have any inner value, their token economy doesn’t work and these projects were created only to grab some money by slapping ‘blockchain’ on them. However, some of these coins can have a bright future, the problem is to guess the right ones. Pantera Capital buys for a long hold, so they shouldn’t care about paper losses. Eventually, all coins that won’t die until the next bull will surge again, so let’s not draw conclusions until the next year.

Many other funds show the similar dynamic. I’ve already mentioned Mike Novogratz. He’s a billionaire, that’s enough to describe him. However, we should not ignore the fact that for some reason he continues to make ridiculous statements, calling bottom at all possible levels, talking about $100,000 per Bitcoin by the end of the next year, when he feels extra bullish, and changing his prediction a week later after one-two big red candles (I think somebody should draw a chart of his predictions at the end of 2018, it’s a pity I’m too lazy for this). Anyway, his Galaxy Digital Assets fund reported a loss of $134 million, showing that even billionaires can be wrong sometimes. Or many times.

The year 2017 was a magnificent year for pretty much everyone, except for the most greedy ones. But the blessed times of brainless growth seem to be over. It’s very unlikely that big guys with bottomless pockets will take all this crowd up to the moon. Everyone has to choose wisely from now on — the next bull run will top the previous heights, and increase the capitalization of the crypto market, but not for all coins, and it will also end, nothing can grow endlessly. The good fund should know how to make money in good market conditions and also in bad market conditions. If it shows the same dynamic as an ordinary retail investor, it’s pointless to invest in this fund. So let’s suppose this is the point where everyone starts to realize that crypto market has two directions and starts to apply risk management to his investment portfolio — and then we’ll never see such news again.