Strong performance by specialist crypto funds has whetted traders’ appetites
Financial markets are cosying up once more to crypto. Institutions such as banks and asset managers have long had a vexed relationship with cryptocurrencies, put off by reputational risks, lack of regulation and volatile returns. But a spell of better performance is drawing them deeper in.
Dedicated cryptocurrency funds returned more than 16 per cent in 2019, according to a survey from Eurekahedge. In contrast, traditional hedge fund strategies yielded 10.4 per cent, according to HFR. “Bitcoin has a higher return on a one, three and 10-year basis than any other asset class,” said Steve Kurz, head of asset management at Galaxy Digital, a specialist cryptocurrency firm founded by billionaire investor Mike Novogratz, once of Goldman Sachs and Fortress. “When the returns are so high, investors will have to pile in.”