Meanwhile, cryptocurrencies are increasingly used for criminal activities such as money laundering, but the number of reputable investors who are interested in Bitcoin & Co., is growing steadily.
Despite the plunge in prices and the enormous volatility, more and more opportunities are being created to invest in cryptocurrencies. The number of hedge funds focused on trading in digital coins is growing rapidly.
Since October of last year, the number of these crypto-investment opportunities has doubled. According to the British market research institute Autonomous NEXT, in February they reached a record high of 226 funds with assets under management of around 3.5 to 5 billion US dollars. While there were around 35 funds at the beginning of 2017, the number rose to 55 by mid-August.
Meanwhile, a large part of cyber currency had to cope with huge price setbacks. While bitcoin hit a record high of just under $ 20,000 last December, the most popular digital currency slipped to below $ 6,000 in January. Meanwhile, a lot of value could be recovered, but the strength of last December could not be regained. Even competing digital currencies had to go through a similar course. The total market capitalization of these currencies, according to CoinMarketCap, is currently around $ 446 billion, compared to $ 830 billion at the beginning of January.
Difficulties due to price fluctuations
Trading is made difficult by these huge price swings, said Autonomous NEXT spokesman Lex Sokolin. Despite everything, he looks optimistically into the future. In his opinion, hedge funds should continue their positive development, provided that the market capitalization of the digital coins does not rapidly decrease overnight or suddenly strong regulations are passed. “It’s true that the recent bearish sentiment in the market is making it a bit harder for investors than many are used to – but I do not think that will stop the influx of money,” said Sokolin.