According to Bloomberg News, 97 crypto funds have closed this year, out of nearly 700 globally. Despite a 15.2% average return in the first half of the year, these funds lagged bitcoin’s 83.3% gain. The closures were blamed on industry upheaval and the difficulty in obtaining new banking service partners.
Speculative Funds
“Directional funds performed well, but underperformed bitcoin,” Bruckner explained in a blog post regarding the 21e6 statistics. “While many funds had to slow down their operations due to regulatory uncertainties surrounding popular banking partners and fund administrators, discretionary crypto funds did not face this issue.”
Meanwhile, “choppy” markets weighed on quantitative funds.
“Investor confidence increased slightly, but fund inflows and fund launches do not yet indicate a recovery.”
Signal Shift
Increasing regulatory scrutiny has resulted in the closure of roughly 100 crypto funds throughout the world. Governments and financial institutions are actively monitoring the crypto area to develop clearer norms. Uncertainty about future regulatory changes has made it difficult for funds to confidently navigate the terrain. The crypto investing market is likely to witness additional consolidation as surviving funds adapt and evolve as the dust settles. Investors may proceed with care, seeking more established and transparent investment instruments. Cryptocurrency supporters are hopeful about the long-term potential of digital assets, and as the sector grows, new players with creative techniques and risk management measures are expected to emerge.
