Blockchain and
cryptocurrency funds have lost nearly 50% in value since the beginning of 2018,
sector data provider Hedge Fund Research (HFR) reported.
The HFR Blockchain Index
declined 22% in June alone and by 49% in the first six months, while the HFR
Cryptocurrency Index dropped 23% last month and a total 48% from January to
June.
The drop in the blockchain
and cryptocurrency benchmarks reflects the loss of value in major digital
currencies. For the first six months of this year, Bitcoin (BTC) fell 54% to
$6,385. BTC was trading at $6,404.51 at 2 a.m. UTC Wednesday, data from Coinmarketcap showed.
Since hitting an all-time
high of $20,000 in December 2017, Bitcoin has been on the downward trend.
Across the industry, HFR
said that hedge funds posted mixed performance last month amid growing tensions
about trade-tariff negotiations, while the U.S. Federal Reserve raised interest
rates and M&A activity remained strong. The HFRI Fund Weighted Composite
Index (FWC) fell 0.46% for the month, topping declines European, Asian and
global equities, as well as the Dow Jones Industrial Average.
"Trade-tariff equity
volatility has increased concurrently with strong U.S. earnings at the same
time that the U.S. yield curve flattened and the Fed increased rates, creating
additional pressure on non-U.S. equities. These trade-centric macroeconomic
drivers are likely to accelerate through 2H18, inclusive of upcoming meetings
between U.S. and Russia, contributing to a fluid environment and increased
opportunity set for long/short investing across multiple asset classes
globally. Funds which have demonstrated an ability to navigate this environment
are likely to drive performance & growth in 2H18.", HFR President
Kenneth J. Heinz said.
Surprisingly, despite the
decline in blockchain and cryptocurrency-focused hedge funds, data showed that
crypto funds are the fastest growing segment in the industry.
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