The number of new cryptocurrency fund launches in 2018 is set to surpass the previous year, with more than half of all funds launched in the last 18 months.
Throughout July, Crypto Fund Research reports that 96 new crypto hedge funds and venture capital funds were set up, which is an annual pace of 165. In 2017, there were 156 funds launched, which means the rate has not slowed.
Josh Gnaizda, founder of Crypto Fund Research, said: “We expected a large number of new crypto funds to launch in 2018 to satisfy growing investor demand. However, the pace of new fund launches is a bit surprising given the dual headwinds of depressed prices and less than favorable regulatory conditions in many regions.”
This year has been dubbed ‘year of the crypto fund’, after 2017 proved to be a year dominated by Bitcoin. Cities San Francisc, New York, Singapore and London lead the way, according to the report.
Incoming regulation, uncertainty, and falling prices have apparently failed to stop crypto fund managers from launching new funds, with demand remaining high and a space in the market for that demand to be met.
However, Gnaizda has expressed concerns that the market will be unable to support such a surge in funds over an extended period of time.
“While volatility in the crypto markets can attract some investors to sophisticated crypto funds, it remains unclear if the industry can support such a large number of funds, with limited track record, if we experience an extended bear market,” he added.