Do cryptocurrency hedge funds even hedge?


Hedge fund without the hedge?

It can’t last. Maybe cryptocurrencies aren’t really cash. Perhaps they’re a new class of assets, like stocks or bonds. Could be Washington will rain down regulations on it. Few people doubt digital money is going away, though. And everyone else who watches cryptocurrencies wonders how and when the market for them will crash.

Then the world will find out how many of these hedge funds actually hedged on cryptocurrencies. But so far, nobody knows because Wall Street’s fascination with digital money is mere months old, and nobody has ever seen a bear market for it.

There will be someday. Wall Street whizzes believe they’ll recover, like stocks did time and again, but a steep drop is coming. As sure as fear balances greed, it’s coming. Then the cryptocurrency hedge funds that didn’t adjust for the risks will reveal themselves.