- Crypto hedge fund records good performance
- Rising Bitcoin price and increase in crypto adoption plays a part
Crypto hedge funds have performed better than non-crypto hedge funds. This was achieved by through the increase in the number of institutions that have adopted crypto assets in recent months.
According to a Hedge Funds Index tracker, cryptocurrency hedge funds recorded over a 100% returns in 2020. At the same time, BarclayHedge, after tracking more than 7000 hedge funds, stated that non-crypto hedge funds had only a meagre gain of 1.70%.
The price of Bitcoin has grown from March this year. Also, since most crypto hedge funds hold a significant worth of Bitcoin; the funds have been able to perform better because of the rise in price.
The performance of Decentralized Finance tokens have also played a great role in the crypto hedge fund performance.
Institutional adoption playing a role in crypto hedge fund performance
Cryptocurrencies have seen a rise in its adoption by different organizations.
Big financial institutions like PayPal, Square etc have adopted cryptocurrency. PayPal has announced that it would integrate transactions in cryptocurrency on its gateway. This would first be available for its users in the United States before it is rolled out for its international users.
Many analysts have rated PayPal foray into the market as one of the big leaps crypto assets have made this year. PayPal – through its Venmo app- has over 300 million active users who would be able to enjoy this new feature.
Not only that, Square’s decision to hold at least 1% of its total asset in Bitcoin has also drawn the attention of market players. Many now believe that Bitcoin can be used to hold investments and also as a store of value like other finite valuables eg Gold.
All of the above has played a role in the rise of the price of Bitcoin. Immediately news broke of PayPal’s new crypto feature, the price of Bitcoin rose to over $13000.