If 2017 can safely be considered the year of Bitcoin, then 2018 belongs to cryptocurrency funds as said by the researchers at Crypto Fund Research. According to their analysis, in the first three quarters of this year, a record number of cryptocurrency funds entered the crypto market, with every fifth new hedge fund being cryptocurrency-dedicated. The reasons and the future forecasts of the experts will be discussed in the following article by DeCenter.

The fall of the crypto market and the uncertainty of the regulatory environment surrounding digital currencies did not prevent cryptocurrency funds from opening at a record frequency in 2018. This is evidenced by the analysis of the crypto market in the first three quarters of this year, provided by the research company Crypto Fund Research. According to experts, in the first eight months of 2018, more cryptocurrency hedge funds opened than in the past two years. In 2017, only 16 percent of the total hedge funds that appeared on the market were in cryptocurrencies, and in 2016 less than three percent. Moreover, in 2018, 20 percent of all new hedge funds are in cryptocurrencies.

Cryptocurrency hedge funds are part of cryptocurrency investment funds, which also include venture funds and private equity funds. Currently, 620 cryptocurrency and blockchain funds are represented on the market, of which 303 are hedge funds, 298 are venture capital funds, and the remaining 19 belong to private equity funds.

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As the chart shows, at the moment, hedge funds are the most popular among investors out of all cryptocurrency funds, and venture capital funds are only slightly behind. Also, among the represented hedge funds are hybrid ones, which invest both in cryptocurrency and in ICOs. At the same time, researchers note that the growth in the number of private equity funds is directly related to the further development of companies in the blockchain industry.

Trends in rapid growth have been particularly evident in the past two years. In 2017, 198 new cryptocurrency funds were launched, and a year earlier, this figure was four times lower and amounted to only 45 cryptocurrency funds of all types. As for 2018, according to the forecasts of researchers, about 220 new funds will appear on the market by the end of the year, all intended for investment in cryptocurrency.

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Moreover, experts suggest that existing traditional hedge funds will also be interested in adding digital assets to their pools. The same applies to venture capital firms, which will continue to add attractive investments in blockchain, as well as launch separate blockchain funds.

In conclusion, researchers at Crypto Fund Research reviewed the geographical indicators of cryptocurrency funds. According to their data, almost half of all cryptocurrency investment funds are based in the U.S.A., where today, 310 cryptocurrency funds of various types operate. In second place is China (Hong Kong) with 55 funds, and in third place is the U.K. with 40. Also, researchers noted that the number of new cryptocurrency funds in Eastern Europe, Russia, and offshore zones has recently increased.

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Among the cities that are considered attractive for investment funds in digital currencies are those where the venture capital industry is most developed. This list is headed by San Francisco, where most of the venture capital funds are concentrated. Next comes New York, which is considered the world capital of hedge funds. The list also includes London, Singapore, Hong Kong, Zurich, and Chicago, each of which has a significant number of cryptocurrency funds. Separately, the experts predict the development of a favorable environment for cryptocurrency funds in Chicago, where trading in options and futures on Bitcoin is allowed.

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“We expected that in light of the growing demand of investors in 2018, a large number of cryptocurrency funds would open, but the speed of their launch surprised us,” said Joshua Gnaizda, founder of Crypto Fund Research, stressing that this happened even in spite of obstacles, such as a drastic decline in cryptocurrency prices and adverse regulatory conditions present in many regions. He also noted that the high rate of opening of new cryptocurrency funds will not last long, but now there are no signs of its slowdown.