Crypto hedge funds are investment vehicles that pool capital from accredited investors to participate within the cryptocurrency markets. These funds goal to maximize returns through varied strategies, including long-term holdings, active trading, arbitrage, and initial coin offerings (ICOs). Unlike traditional hedge funds, zaramea01 which may need a broad mandate, crypto hedge funds specialize in the advancedities and dynamics of crypto markets.
Bitcoin: The Anchor Asset
Despite the proliferation of cryptocurrencies, Bitcoin remains the bedrock of most crypto hedge fund portfolios. Its market leadership, liquidity, and status as a digital gold commonplace make it a relatively safer and more stable investment within the crypto space. Most crypto hedge funds keep a significant portion of their assets in Bitcoin as a hedge against the volatility of smaller altcoins.