- Pantera Capital’s Digital Asset Fund has declined in value since it began in December 2017.
- Both Lex Sokolin and Rick Marini, stakeholders in the crypto fund industry, have predicted tough times due to the crypto plunge.
- Despite the harsh times ahead for multiple hedge funds, reports show that cryptocurrency is set to increase in price despite an economic recession.
According to a tweet from October 6th, one of the largest digital asset hedge funds, Pantera Capital released some shocking numbers, showing a 72.7% decline to date for 2018. In total, the fund has fallen by 40.8% since its inception back in 2017. The alarming figures of August alone in the tweet depict the fund had lost 22.3% of its value.
These figures form a sharp contrast to April when the CEO of Pantera Capital Management Dan Morehead stated that it was a “screaming buy” when Bitcoin, the world’s largest cryptocurrency, was trading at around $9000, more than 25% higher than its current value. He also reiterated this in June since which the cryptocurrency has lost around 10% of its value.
Not the only Digital Asset Fund in Trouble
2018 is proving to be trying year for digital asset hedge funds as a majority of the projects that held ICOs in 2017 and 18 have been selling off their token assets for fiat to pay bills and wages. Due to this, many hedge managers bought their tokens to increase their interim profits, but the ICO market kept going down and the investments failed to yield any benefit throughout the year.
Based on a report published in August by Autonomous Next, a majority of the hedge funds had reported more than 50% losses by the second quarter of 2018. Mike Novogratz’s Galaxy Digital LP reported over $175 million on damages alongside Kyle Samani’s Texas Based Multicoin Capital, Polychain Capital, Grayscale Bitcoin Investment Trust among others.
Light at the end of the tunnel
Despite the markets poor performance in 2018, there is optimism among stakeholders. Investors still believe that despite poor market performance in 2018, cryptocurrency prices will rise, primarily because of a mainstream economy recession.
These sentiments were also seconded by a twitter poll that saw 59% of the respondents agree that the costs of virtual currency will increase during an economic crisis. This is on a survey that was conducted by Fundstrat Global Advisors recently. Pantera Capitals is still working at diversifying their assets into portfolios with maximum earning potential.
The firm was recently a part of an investment round led by TD Ameritrade for ErisX and since the capitals portfolio already includes notable blockchain projects such as 0x, Abra, Brave, Shapeshift, and Ripple.
From the above stats, despite the tough times that a majority of the Digital Asset Funds have had this year, there is a silver lining to look forward to in the near future. Henceforth, the least the Pantera can do is to try to keep afloat by diversifying their portfolios as they wait out the storm.