In the first quarter of 2024, cryptocurrency hedge funds reach record numbers
According to data from Crypto Fund Research, the first three months of 2024 saw a surge in new cryptocurrency venture and hedge funds. A total of 25 new funds were launched during this period, marking the highest number since the second quarter of 2021. This figure is double the number of funds that closed and almost triple the amount of new funds compared to the first quarter of 2023 when only 9 were opened.
Market recovery leads to influx of new players
The increase in new funds is attributed to the market’s recovery following a prolonged bearish trend caused by financial issues within the crypto industry. Bankruptcies of major players like Alameda Research and Three Arrows Capital created opportunities for fresh entrants in the market, according to lead researcher Joshua de Vos from CCData.
Diverse focus on cryptocurrencies and AI investments
Many of the newly launched funds are not solely concentrated on cryptocurrencies but also on investments in artificial intelligence technologies. Names like Frachtis by Xavier Mignan, Topology by Casey Caruso, and Nazare Ventures by Steven Waterhouse from Orchid Labs are among the notable new funds.
Bitcoin ETFs and Ethereum approval drive market momentum
The launch of bitcoin spot ETFs in the US on January 11, 2024, along with Ethereum-based products’ partial approval, have fueled the cryptocurrency market’s revival. While Ethereum spot ETFs are yet to be introduced, they are already generating increased interest and activity in digital assets.
Competition heats up as ETFs provide new investment avenues
The rise in ETFs offers investors more accessible and secure paths to invest in cryptocurrencies, intensifying competition for hedge funds. Nonetheless, the growing number of new funds signals strong interest and optimism for future prospects in the crypto market.
