The first thing to note is that despite the safe-haven characterization of crypto, the asset class itself in March appeared to be closely correlated with traditional public markets. Additionally, there were some notable crypto funds that went insolvent due to unhedged positions, a leverage mismatch or challenges with conducting proper risk management. Similar to December 2017, some funds were so beneath their high-water mark that the fund managers decided to wind down their fund, issue compulsory redemptions and stop activities.
On average, crypto hedge funds were down among our clients, but not as much as their traditional counterparts. Both categories weren’t down nearly as much as their respective market benchmarks.