New York: Global investors are gathering shares of cryptocurrency funds and companies as they seek exposure to a sector that could be affected by the conflict in Russia and Ukraine.
Fundstrat research said in a recent statement to customers that buyers of venture capital (VC) have invested about $ 4 billion in cryptocurrencies in the last three weeks of February. VC added another $ 400 million to industry startups last week, the data showed.
VC investment coincides with high weekly earnings. Since the beginning of the year, weekly investments in the industry have averaged between $ 800 million and $ 2 billion, according to Fundstrat data.
New cryptocurrency funds have raised nearly $ 3 trillion since Friday in the last two weeks, the most this year.
“The conflict in Ukraine has armed our financial and digital economy and really accelerated the adoption of the blockchain,” said Paul Hsu, founder and CEO of Decasonic, a $ 50 million hybrid fund that invests in digital assets and venture capital. He added that there is a $ 200 million request to invest in his fund.
“We are seeing a resurgence of crypto and blockchain away from real estate and bond funds, for example, due to higher interest rates. I’ve seen that with my funds but unfortunately I’m closed, I can’t. Accept more funds or investors,” Hsuk said .
Data from Refinitiv Lipper showed that US investors had withdrawn $ 7.8 billion net from bond funds by the week of March 9th.
Real estate funds had net outflows of $ 707 billion over the same period after posting outflows of $ 1.150 billion last week.
“The original crypto companies are still rising at very high ratings and many rounds of financing are still overrated,” said George Melka, CEO of SFOX crypto broker. “In fact, the ratings for cryptographic launches are probably the highest I’ve seen.”
Bain Capital Ventures, a unit of private equity firm Bain Capital, for example, announced earlier this week that it was launching a $ 560 million fund aimed solely at crypto-related investments.
Cryptocurrencies have outperformed traditional risk assets, such as stocks during the crisis. Bitcoin rose 12.2% in the last month, while ether gained 8.8%. Since the Russian invasion of Ukraine on February 24, digital currency has gained 14.5% and 13.5%, respectively, while the S&P 500 has only gained 3.2%.
Capital income, hedge fund returns
Crypto investment products and funds saw $ 163 million in new institutional money in the two weeks to March 4, and blockchain stock revenues were about $ 15.6 million, according to asset manager CoinShares.
$ 127 million in revenue has been the highest ever seen so far this year. Flows for the crypto sector turned positive at the end of January, five weeks after a live exit, CoinShares data showed.
The returns on cryptocurrencies have stabilized.
The BarclayHedge cryptocurrency traders index fell 1.5% in February, according to data released on Monday, about 39% or about 43% of all remaining cryptocurrency asset managers. The index fell by almost 13% in January and by 10% in December.
“There’s really no panic about the conflict in Ukraine either,” said Joe DiPasqual, CEO of BitBull Capital, which manages one cryptocurrency fund and two hedge funds.
BitBull’s two hedge funds, which use market-neutral strategies, rose year-on-year, DiPasqual said, benefiting from bitcoin and ether recovery in February.
“People are starting to fund it, driven by price valuation over the last two years,” he said.