The digital asset fund of Pantera Capital has dropped massively since the start of the year, performing even below Bitcoin. The compound annual growth rate (CAGR) of the fund has also dropped by 50 percent since the start of the year.
A rough 2018
The cryptocurrency market has lost roughly $600 billion since the start of the year and this drop has affected other cryptocurrency-related companies, according to a tweet published by Collin Crypto.
Pantera Capital, one of the largest crypto hedge funds in the world, released a report that rocked the crypto world, revealing that the fund is down nearly 73 percent since the start of the year.
In August alone, the firm revealed that it lost 22.3 percent of its value. Since the fund was established in December last year, it has lost roughly 40.8 percent of its value. This led to the company’s CAGR dropping by 50.3 percent since the start of the year.
Earlier in April, when Bitcoin was trading at $9,000, the CEO of the hedge fund, Dan Morehead, stated that Bitcoin was at its perfect price to buy.
He reiterated that statement in June, at a time when Bitcoin price lost 10 percent of its value.
The fund holds more than 20 cryptocurrencies such as Augur (REP), Brave (BAT), Enigma (ENG), and 0x (ZRX). The huge number of cryptos in their portfolio could have caused the massive drop as it wouldn’t have been that way if they had invested 100% in Bitcoin.
Pantera Capital, not the only one
Bitcoin has only lost 50 percent of its value since the start of the year, falling far from $14,000 valuation back in January.
Pantera Capital is not the only crypto hedge fund that has recorded losses since the start of the year. Grayscale Bitcoin Investment Trust has lost most of its value and is currently at its lowest point since the start of the year.
Despite hardships throughout the year, Pantera Capital is still moving forward, launching a third cryptocurrency fund last month, for which it raised $70 million.
Market experts believe that Pantera raising that amount despite market situations is a function of how fast space is moving, the talent coming in, the opportunities, and the sizing of rounds.
Crypto market not like others
The massive losses recorded by Pantera Capital is not common with traditional hedge funds. For instance, HFRX Global Hedge Fund Index has lost just 1.42 percent since the start of the year.
This is an indication that the cryptocurrency space doesn’t work like the traditional financial markets.