U.S. investment firm Pantera Capital’s Digital Asset Fund has plummeted in value since it first launched in December last year.
A report that has recently been circulating on social media indicated that the firm’s returns to its investors had declined by over 40 percent, adding to the fund’s year-to-date losses, which has risen by more than 70 percent. On top of this, the fund’s compound annual growth rate (CAGR) has also sharply depreciated by over 50 percent since it first began operations.
As it stands, the crypto industry had already lost a massive 70 percent of its market capitalization since the outset of 2018.
In addition, majority of initial coin offering (ICO) projects have also reportedly liquidated their digital assets for fiat, consequently impacting the market, while a large number of hedge managers including Digital Asset Fund that has purchased virtual assets in an effort to maximize interim profits have also been adversely affected by the massive sell out.
At present, the ICO market continues to dwindle throughout the year, as investments made into such projects fail to generate profits, with most ICOs eventually fizzling out.
Concomitant with the ICO market’s deterioration, the crypto market’s top digital asset Bitcoin has also so far failed to mitigate its losses, as its market cap remains bearish throughout the year. As confirmed by a report released in August by FinTech analysis firm Autonomous Next, a massive number of hedge funds have also seen at least a 50 percent loss this year, including Mike Novogratz’s Galaxy Digital LP which had reportedly suffered a $175 million in damages.
Among other hedge funds that have also suffered losses also include Multicoin Capital and Polychain Capital. Currently, a total of nine funds, including Alpha Protocol and Crowd Crypto Fund have been prompted to shut down operations after failing to sustain through the cryptocurrency’s intrinsic volatility.
According to Texas-based Multicoin Capital Austin co-founder Kyle Samani, “New capital has slowed, even for a higher-profile fund like ours.”
As global director of FinTech strategy at Autonomous Research Lex Sokolin further claimed, 10 percent of all crypto funds will die by the end of the year. Crypto fund investor Ricki Marini also believes that only a handful of hedge fund will be able to sustain through the prevailing bear markets.
Beyond its year-to-date losses, Pantera Capital is also looking into diversifying its assets into projects that could potentially yield maximum benefits. More recently, Pantera Capital has invested in a funding round led by cryptocurrency spot and futures exchange TD Ameritrade for ErisX, on top of the firm’s already impressive roster of blockchain projects, including Ripple, 0x, Abra, Brave, and Shapeshift.