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Digital asset investment products saw the largest single weekly inflows since July 2022 last week, totalling $199 million, correcting almost half of the previous nine consecutive weeks of outflows, according to the latest Digital Assets Fund Flows Weekly Report from CoinShares.
Bitcoin was the primary beneficiary, seeing $187 million in inflows last week, representing 94% of the total flows, while short-bitcoin saw outflows for the ninth consecutive week totalling $4.9 million.
This positive turn in sentiment didn’t trickle down to altcoins though, with only very minor inflows seen.
Hedge funds that want to be active in the crypto space are immediately faced with the difficulty of how to execute on their trading strategies. Other asset classes, like equities or commodities, don’t present this problem in such a heightened way because those markets have well-defined, regulatory-compliant ways to act on trade ideas.
This article argues that over-the-counter derivatives (for brevity, swaps) can help mitigate regulatory and operational difficulties that hedge funds face when executing on crypto trading strategies. The article focuses on US hedge funds and US regulations because the US generally presents the greatest difficulties for hedge funds
The rapid growth of digital assets has created unique challenges and opportunities as the industry balances the needs of an innovative, ambitious sector with the checks and balances needed to ensure the security and safekeeping of assets.
Market structures are developing to mirror traditional financial standards and against this backdrop, the custody of digital assets has come under sharper scrutiny. There are two key approaches to custody that investors and asset managers should consider, self-custody or managed custody. Each comes with its own set of benefits and drawbacks which investors must weigh when making their decision.
In this context, asset
In the context of growing demand for digital assets, hedge funds operating in the space need to make a choice critical to the growth of their business – do they build their digital infrastructure or buy in the capabilities from a third party? Their choice here can significantly impact the fund’s operational efficiency and selecting which best suits their specific fund and business can support their development in a fragmented and shifting market.
The digital assets market has experienced significant growth, supported by the rising participation of hedge fund managers and institutional investors looking to capitalise on the returns this new asset class has to offer. But as an emerging area of interest, the infrastructure to support investment and trade is still in development.
Rise in specialist providers
Hedge fund managers have lamented the lack of prime brokerage services specifically tailored to crypto assets, with limited access to crypto prime brokerage services being raised as one of the top concerns in the 2022 PwC Crypto Hedge Fund Report. Further, the report reveals an
Marshall Wace, the London-headquartered hedge fund major founded by Paul Marshall and Ian Wace, has tapped one of Citadel’s top credit portfolio managers – Dan Shatz – for a new role in New York, according to a report by eFinancial Careers.
Japanese and emerging markets hedge funds extended gains to begin 2023, driven by optimism toward peaking US and global inflation, and the near end of the US-led interest rate increasing cycle, according to the latest HFR Asian Hedge Fund Industry and HFR Emerging Markets Hedge Fund Industry reports.
India will experience significant economic growth, similar to that seen during China’s economic transformation in the 1980s, according to a report by the Hong Kong Standard, citing Ray Dalio, the founder of hedge fund Bridgewater.
Dalio praised the leadership of Minister Narendra Modi following a meeting with the Indian prime minister saying that his policies are enabling India to experience “the fastest growth rates and biggest transformations in the world.”
And Dalio isn’t the only one to see India’s potential with Apple chief executive Tim Cook saying in a recent CNBC interview that India represents a “huge opportunity” after a
Ken Griffin’s Citadel has slashed its holding in UK fashion retailer Boohoo from 8.9% to just 1.8% after shares in the business fell from 62p at the time of the hedge fund’s initial investment, to just 34p, according to a report by BusinessLive.
GoldenTree Loan Management II (GLM II) and its affiliated investment manager GoldenTree Asset Management LP have closed a $493 million collateralised loan obligation (CLO), GoldenTree Loan Management US CLO 17 (GLM US CLO 17), to be managed by GLM II.
