In August, the digital assets fund from trading firm Two prime grew by 26.94%. This was more than double the 12.35% gain of Bitcoin in the same month. These numbers can as total assets under management of crypto hedge funds around the globe increased to almost $3.8 billion in 2020, from $2 billion in 2019.
Two Prime’s fund, which has assets under management of $40 million, saw year-to-date returns through the end of August rise 183% vs. Bitcoin’s gain of 62%. The firm is also ahead by its 12-month returns through August 31, which jumped 537% compared to Bitcoin’s 313% rise.
Two Prime’s outperformance of Bitcoin comes as the median crypto hedge fund gained 128% last year and 30% in 2019. This is according to a PwC report. The average assets under management for this year’s surveyed funds increased to $42.8 million from $12.98 million.
According to Two Prime Chief Investment Officer, Nathan Cox, “Despite the recent news of China banning crypto… again, options skews on ETH and BTC are still leaning bullish for most of the durations into end of year and beginning of next year.”
Two Prime has announced that it will increase its performance fee to new investors in the digital assets fund to 16% from 10% starting in January 2022. The fund’s 2% management fee will remain as is.
This is not the first time that Bitcoin https://www.banklesstimes.com/cryptocurrency/bitcoin/wallets/ has been challenged this past year. While the coin still leads the cryptocurrency world, many other coins are starting to gain support and even trump Bitcoin in various areas.
Cryptocurrencies, such as Ethereum, are being used to create decentralised financial systems that could well be the future of crypto as we know it. Decentralised finance systems are becoming increasingly popular as worries around crypto security and regulation grow.
After China’s recent “crypto crackdown”, it is thought that many investors will turn to decentralised finance, instead of centralised finances like Bitcoin. This shift could see other cryptocurrencies leading the way in the future.
