According to BarclayHedge, cryptocurrency funds around the world have seen a sharp rise, which is explained by the rise in the price of cryptocurrencies, led by Bitcoin and Ethereum, as well as interest from institutional investors and favor from regulators.
In 2021, the BarclayHedge Cryptocurrency Traders Index, which is calculated based on the activity of 39 funds, grew by 138.1%. At the end of 2020, this indicator was even higher, amounting to 173% – at that time, the extreme instability of cryptocurrency courses, fueled by the effects of the pandemic, had a positive effect. Over the past year, bitcoin has surged 60% in price, hitting a record $69,000 in November, while ethereum, the world’s second-largest blockchain cryptocurrency, is up 400% in price overall.
Some difficulties could not spoil the overall positive momentum of the cryptocurrency market: in December, the funds lost about 11% after Bitcoin (by 19%) and Ethereum (by 20%) prices fell. However, momentum from traditional currency funds proved moderate — the relevant BarclayHedge index rose 2.2% over the past year, according to data from 60% of reporting companies. And here too, 2020 was more successful with 4% growth as central banks kept interest rates low in 2021, reducing volatility and hence returns on capital.