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Cryptocurrency funds are a way in which investors can diversify their investments. Cryptocurrency funds are a pool of funds from various investors that are used to invest in various cryptocurrencies, such as Bitcoin, Ethereum, Litecoin, and others. This fund can be managed actively or passively with various investment plans, ranging from long-term holding to active trading.
Crypto funds saw tremendous capital inflow due to investor interest at the industrial peak of the fourth quarter of 2021, with a total AUM of $62 billion. However, the bear market of 2022 caused them to suffer greatly. Inflows decreased by 95% from 2021 to 2022, and the total amount of assets owned by crypto funds fell by 66% in 2022.
Despite the decline in the market in the previous years, we are now seeing signs of recovery, with significant crypto funds rising by as much as 50%.
Crypto Funds: An Overview
This is a new type of financial tool, comparable to mutual funds and ETFs. It is a collection of digital tokens and cryptocurrencies instead of stocks, indices, or commodities.
We will try to highlight the top cryptocurrency funds in 2023 in this write-up. Also, we will try to provide targeted advice for both institutional and individual investors.
According to Per Crypto Fund Research, since the first emergence of Bitcoin funds some ten years ago, more than 850 cryptocurrency funds have been launched, and this new market niche of fund management business is expanding at breakneck speed.
Crypto Funds Ranking for 2023
For this analysis, we assessed a few of these top-performing funds. We examined their assets under management (AUM), number of projects, and tenure as key performance factors. The primary sources of information were the Crypto Fund List and Crypto Fund Research.
Grayscale
Grayscale was founded in 2013, and it has so far grown to become the biggest asset management company for digital currencies. The company was able to attain 73.4% of the digital currency industry in 2021. The company offers a wide range of services, which include single-asset trusts and diversified crypto DeFi funds. Grayscale had a $43.5 billion total asset under management (AUM) at its height. This company continues to be the largest manager of crypto assets in 2023 after witnessing a fall of more than 50% in 2022.
Pantera Bitcoin Fund
Pantera Bitcoin Fund has also been a pioneer in cryptocurrency funds since 2013, like Grayscale. Pantera is based in the United States of America. It is an institutional-based asset manager that focuses on a single blockchain. Pantera has launched four distinct cryptocurrency-focused funds over time and has taken the lead on more than 100 of 210 investments. It has made approximately $125 million from a total investment of $23 million in 26 businesses. The firm has $3.8 billion worth of Asset Under Management (AUM).
500 Global
This firm has a portfolio of more than 2,700 companies in more than 75 countries. It was originally founded as 500 Startups. It makes investments in a variety of industries and has blockchain and cryptocurrency firms like BlockCypher and Hijro in its portfolio. By 2023, 500 Globals would have invested in over 140 centaurs and 51 unicorns, each worth over $1 billion. The firm has $3 billion worth of Asset Under Management (AUM).
CoinShares
CoinShare, Europe’s first and largest Bitcoin investment fund, was started in 2014. Some of the products it offers include ETFs, ETPs, and other multi-asset portfolios. CoinShares International was listed as a public corporation in Sweden in 2021. It has also been recognized by Nasdaq’s First North Growth Market. The firm has $2.23 billion worth of Asset Under Management (AUM).
a16z Crypto
Andreessen Horowitz is what “a16z” stands for. This is a well-known Silicon Valley venture capital firm run by software engineers and businessmen Marc Andreessen and Ben Horowitz. The company was founded in 2009 and unveiled its specific cryptocurrency fund in 2018. Since then, the funds have been active in the crypto bear market, raising $4.5 billion in 2022. It has four distinct funds investing in digital assets, blockchain, and Web3. It has $4.56 billion worth of Asset Under Management (AUM).
Galaxy Digital Capital Management
This New York-based investment company is specialized in blockchain technology and digital assets. The firm was founded by Michael Novogratz. During the most recent crypto bull run in 2021, its Asset Under Management (AUM) increased by about 600%. Currently, the firm has investments in more than 229 companies all over the crypto ecosystem. The company has $1.9 billion worth of Asset Under Management (AUM).
Polychain Capital
This firm was founded by Olaf Carlson and was aimed at providing investors with extraordinary returns through active management techniques. Instead of enterprises, the fund invests in digital currency. Ava Laboratories, Coin DCS, and Dfinity are just a few of the 144 firms that the funds have invested in. The firm has $2 billion worth of Asset Under Management (AUM).
Multicoin Capital
This firm was founded in 2017 by Kyle Samani. This company invests mainly in crypto assets, tokens, and startups across Layer 1 and Layer 2. Multicoin’s portfolio includes notable investments in Algorand, Flow Ethereum, and Lido. Its Asset Under Management (AUM) are worth $2.8 billion.
Suitable Crypto Fund management for Large Investors
500 Global is a great option for investors seeking general steadiness. 500 Global isn’t a “pure crypto” fund, but its Global Fund has a remarkable track record of fostering over 50 tech unicorns and over 140 firms valued at over $100 million.
Grayscale is ideal for cryptocurrency investment, being the biggest and most reputable investment company for digital assets.
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