The global investors seem to be scraping up the stakes in the cryptocurrency companies and funds while seeking exposure to the sector that many thinks can withstand the current conflict between Russia and Ukraine.
Fundstrat, the research team stated in one of the latest announcements to its clients that the VC or venture capital buyers had invested about four billion USD in the crypto platform within the last 3 weeks in February. According to the data, Venture Capitals poured in four hundred million USD more for startups in that sector.
The Venture Capital investment remains consistent with the large weekly inflows. According to the Fundstrat data, since earlier this year, the weekly investments have remained anywhere at an average between eight hundred million to two billion USD in the industry. The newer crypto funds have also increased about three billion USD over the last 2 weeks, the greatest this year.
The CEO and founder of Decasonic, Paul Hsu, stated that the current conflict in Ukraine had weaponized the digital and financial economy while accelerating blockchain adoption. Decasonic is a hybrid fund worth fifty million USD that invests in venture capital and digital assets. Paul also noted that there had been a demand of two hundred million USD to invest in the fund.
Paul mentioned that a reallocation to the crypto world and blockchain from the bond funds and real estate had been noticed, and for instance, he pointed out more excellent interest rates. He also said that he had seen the same with his funds. Although being close-ended, he could not admit more investors or funds.
The data by Refinitiv Lipper showed that the investors of the U.S. pulled a total of 7.8 billion from the bond funds in that week till 9th March.
Real estate funds experienced total outflows of 707 million USD from that period after showing outflows of 1.15 billion USD in the previous week. The CEO of SFOX crypto broke, George Melka, said that the native crypto companies were still raising significant valuations. At the same time, lots of funding rounds were still oversubscribed, and as a matter of fact, the valuations of the crypto startup were probably the highest he had ever seen.
The unit of the private equity firm named Bain Capital, Bain Capital Ventures, had announced that it was to launch the fund worth 560 million USD focused primarily on the investmentsrelated to cryptocurrency.
The crypto assets outperformed the conventional risk on the assets like stocks at the time of crisis. Bitcoin increased 12.2 percent in February, while Ethereum rose 8.8 percent. After reaching the bottom on 24th February after Russia attacked Ukraine, these digital currencies gained 14.5 percent and 13.5 percent. The. SPX (S&P 500) increased only 3.2 percent.
Return of Hedge Fund, Capital Inflows
As per the data submitted by the asset manager at CoinShares, by 4th March, 163 million USD came in as new institutional money for crypto funds and investment products in two weeks, while 15.6 million USD of blockchain equities came as inflow.
The 127 million USD inflows were the greatest as seen in the year. The flows into the crypto sector went positive after outflows of five consecutive weeks in late January, as per the CoinShares data. The returns of the crypto fund seem to have stabilized.
As per the data, the crypto traders index of BarclayHedge went down to 1.5 percent for February, with around 43 percent of total cryptocurrency asset managers in the tracks or thirty-nine funds reporting. This index went down to about thirteen percent in January, and it was ten percent down last December.
The CEO of BitBull Capital, Joe DiPasquale, stated that there was nothing to panic about even though the significant Russia-Ukraine conflict. BitBull Capital manages the crypto fund of funds and two hedge funds that employ market-neutral strategies. The hedge funds, as per DiPasquale, went up in 2021 and helped in the recovery of Ethereum and Bitcoin in February. He also added that the prices from the last few years, many people were starting funds.