Bitcoin is on the rise again. Checked hedge funds performance trading crypto assets.
Main reason - funds could produce higher returns compared to hold strategies. Hedge funds are quicker to respond, can go long and short, most importantly professional traders are in place.
My learnings so far:
1. Hedge funds performance is poor compared to Bitcoin buy and hold. Funds act more like volatility reducing mechanism rather than added growth.
2. Performance exception is Quantitative funds. Positive returns even in 2018 bear market, lower returns in Bull market during 2019. On average - similar returns to buy and hold Bitcoin.
3. Bad performing funds just don’t survive long enough - thus data is hard to track.
4. Fair option is to buy and hold assets yourself. Or consider quantitative funds for more stability.
1. Only 2018-2019 data.
2. 48 funds included.
3. High management fees and possibly higher entry amount required.
4. Source: PwC https://www.pwc.com/gx/en/financial-services/pdf/pwc-elwood-annual-crypto-hedge-fund-report-may-2020.pdf
Hey Andrew, I can support you by sharing how I learnt to read financial statements and create a story behind securities' valuation methods. But I would rely on people who spent time professionally and have the right credentials to educate about investing.
Two of my favourite bubbles have merged! :)
Bitcoin transactions consume close to 100TWh energy per year, most of it produced in coal-fired plants. It will be harder for Musk to pretend it is all about saving the planet.
But it is not completely unexpected - losing market shares, revenues stagnate, can’t make profit selling cars, what is there left to do? Speculate in cryptocurrencies, of course.