The cryptocurrency market is extremely volatile and operates 24/7 every week of the year. This provides an excellent opportunity to experience great returns but also increases the exposure to negative returns.
The resources available to leading crypto hedge funds allows them to reduce the downside risk around negative returns. At the same time, these hedge funds have the experience, knowledge and resources that allows them to achieve consistently high returns.
Depending on the type of hedge fund and their strategy around dealing with these risks, some will have long term hold approaches while others will have tools and technology to allow them to spot and take advantage of these trends. This could be dumping (or short-selling) cryptocurrency prior to a correction or purchasing cryptocurrency at a low price after a price contraction.
With over 1,600 cryptocurrencies now available in the market and hundreds planning ICO’s each month means there are a large number of diversification options available. A cryptocurrency hedge fund will have a strategy around this and will make sure their portfolio is made up of a well balanced portfolio of cryptocurrency and the sectors they are in are what they perceive will achieve the most growth within the future.
A significant amount of resources are deployed by these crypto hedge funds around the trading technology they use on a daily basis. They’ll accompany this with the smartest investing minds in the crypto space, along with an abundance of deep market and token analysis to allow them to make the best decisions. The combination of these ingredients will foster a strategy that returns the best possible risk adjusted returns within the crypto assets space.