How Digital Asset Funds Are Performing During the COVID-19 Crisis

The first point to highlight is that, despite the perception of cryptocurrencies as safe-haven assets, the market in March showed a strong correlation with traditional public markets. Additionally, several notable crypto funds faced insolvency due to unhedged positions, leverage issues, or inadequate risk management practices. Similar to the situation in December 2017, some funds found themselves significantly below their high-water marks, prompting managers to wind down operations, issue mandatory redemptions, and cease activities.

On average, crypto hedge funds experienced declines among our clients, though the drop was not as severe as that of traditional funds. Both categories fared better than their respective market benchmarks.