[2018-06-19] Bitcoin Price Outperformed Crypto Hedge Fund Pantera Capital Last M

[Psicotico]

Bitcoin Price Outperformed Crypto Hedge Fund Pantera Capital Last Month.

Sometimes it doesn’t pay to diversify — just ask cryptocurrency hedge fund Pantera Capital, whose fund underperformed the bitcoin price last month.

According to Bloomberg, the firm’s Digital Asset Fund underperformed bitcoin during May as the cryptocurrency markets continued to decline further from the all-time highs they set in late December and early January.

Pantera CEO Dan Morehead acknowledged the poor performance in a monthly investment letter distributed to clients on Tuesday, explaining that the fund had dropped 26 percent for the month and is now down 51 percent in 2018.

The bitcoin price, meanwhile, posted a 15 percent decline in May and is also down approximately 51 percent for the year. That may not exactly be an attractive return on investment, but at least it comes without Pantera’s management fee.

Pantera’s poor performance in May represented a sharp reversal from April when it rallied 46.2 percent to outperform the flagship cryptocurrency, as well as the crypto market writ-large. Morehead attributed the recent decline to its stakes in Dash, Waves, Bitshares, and OmiseGo, assets which fared poorly during the period.

Diversification is a common investment strategy, but its wisdom in regard to the cryptocurrency markets has long been in debate. Individual asset prices remain highly-correlated, and even today the majority of fiat investments flow into the cryptocurrency ecosystem through bitcoin.

Moreover, so-called “bitcoin maximalists” often point to market cap charts from past years as evidence that — at least to date — diversification has been a poor strategy. To wit, just two of the 10 most valuable cryptocurrencies in June 2013 — bitcoin and litecoin — still rank in the top 100.

That’s an extreme situation, given the nascency of the ecosystem at the time, but glances back at market cap charts from years past reveal a number of now-forgotten projects that investors once believed could take bitcoin’s crypto-crown.

Nevertheless, off-the-shelf diversified investment products continue to grow in popularity. The Coinbase Index Fund recently began accepting investments from accredited investors looking to purchase at least $250,000 worth of cryptoassets, while firms including Grayscale Investments, OKEx, Huobi, and Bitwise Asset Management have rolled out index-tracking products in recent months.

https://www.ccn.com/the-bitcoin-price-outperformed-a-top-crypto-hedge-fund-last-month/

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[vit05]

If anyone is curios, in 2013 the top 10 was:

1   Bitcoin                              $1.219.756.348   $107,73   
2   Litecoin                                  $58.786.215   $3,13   
3   Namecoin                            $3.191.634   $0,540011       
4   Peercoin                                    $2.406.170   $0,124103   
5   Novacoin                             $1.029.229   $3,45   
6   Feathercoin                                $703.624   $0,088320       
7   Devcoin                                      $413.516   $0,000087       
8   Terracoin                               $399.551   $0,134319   
9   Freicoin                                      $330.179   $0,015150   
10   CHNCoin                                $128.012   $0,024441   

[hatshepsut93]

If I were to trade cryptocurrencies for a living, I'd invest in so-called "promising" altcoins only for short term and would close all positions after certain amount of time, regardless of the price, because in my mind any new alt is just a pump and dump / ICO scam, and in the long run there will be no fundamentals to support the price - promises of revolution, disruption and so on only can get the price so far, sooner or later everyone realizes that no real progress is being made.

[richardsNY]

If anyone is curios, in 2013 the top 10 was:

1   Bitcoin                              $1.219.756.348   $107,73   
2   Litecoin                                  $58.786.215   $3,13   
3   Namecoin                            $3.191.634   $0,540011       
4   Peercoin                                    $2.406.170   $0,124103   
5   Novacoin                             $1.029.229   $3,45   
6   Feathercoin                                $703.624   $0,088320       
7   Devcoin                                      $413.516   $0,000087       
8   Terracoin                               $399.551   $0,134319   
9   Freicoin                                      $330.179   $0,015150   
10   CHNCoin                                $128.012   $0,024441   

I traded all these coins on BTC-E back in the days. Looking back, all coins have performed as I expected them to perform, which is bad. Only Litecoin has managed to grow in value, but only based on its USD value. If we look at Litecoin's BTC value, it has lost significantly. Pantera CEO Dan very likely had to deal with worried clients asking what's going on and why they are only losing. Average joes don't know what's going on -- they rely on this hedge fund manager to do his job properly, but while those who entered last year are in the profits, the latecomers can't do anything other than swallowing their on paper losses....

[buwaytress]

If I were to trade cryptocurrencies for a living, I'd invest in so-called "promising" altcoins only for short term and would close all positions after certain amount of time, regardless of the price, because in my mind any new alt is just a pump and dump / ICO scam, and in the long run there will be no fundamentals to support the price - promises of revolution, disruption and so on only can get the price so far, sooner or later everyone realizes that no real progress is being made.

That's the sad truth. Diversification is a good strategy but people forget that Bitcoin itself represents financial diversification. The destiny of cryptocurrency will hinge solely on the fate of Bitcoin for the foreseeable future, so all in on Bitcoin is the way to go as a diversification into crypto.

It's consistently the best performer, and the least affected in bear markets like now. Any gamble on alts, as you say, is short term. You are as likely to lose as to win. Alt speculation is just that, speculation. I see I'm not the only one who sees new alts as ultimately that alone.

[hatshepsut93]

That's the sad truth. Diversification is a good strategy but people forget that Bitcoin itself represents financial diversification. The destiny of cryptocurrency will hinge solely on the fate of Bitcoin for the foreseeable future, so all in on Bitcoin is the way to go as a diversification into crypto.

It's consistently the best performer, and the least affected in bear markets like now. Any gamble on alts, as you say, is short term. You are as likely to lose as to win. Alt speculation is just that, speculation. I see I'm not the only one who sees new alts as ultimately that alone.

I think some established alts worth attention from the perspective of diversification because they have already showed some real progress. For example, I really like Monero, because it probably has the best privacy amongst all coins, and it shows  a very strong long-term pattern for now, but even it is not perfect, I feel like it is very dependent on its legality. If I'm not mistaken, Monero has reached ATH when some big Korean exchange has listed it, but now it's sinking as governments are telling exchanges to delist privacy coins. Ethereum also shows a good long-term potential for at least a couple of years, but it might eventually lose to Bitcoin if Bitcoin will get smart contracts and other features, and if PoS will eventually fail as some experts predict. So, even with some solid altcoins its hard to diversify, so crypto portfolios should have 85-90% of Bitcoin, especially during bear markets.

[darkangel11]

They were trying to invest in a bear market and then counted their losses after a month instead of waiting for a reversal. No wonder they did poorly.
There's that old saying "don't catch a falling knife" and they did just that. I'm bullish, but if I were to invest other people's money, I'd openly tell them that I won't go in until the bear market ends. Pantera is on a good way to going bankrupt if they keep it up.

[BitHodler]

I have seen him brag about his past gains and now there is nothing left for him to brag about. Multiple crypto hedge funds have imploded this year, so they are one of the few lucky ones to still operate, but for how long.

People need to realize that we, if rational and have basic market understanding, can do a better job than all these hedge funds not doing anything other than gambling with people's capital.

I sincerely hope that people weren't trapped in based on how optimistic this hedge fund approached a market that was bound to correct. If so, I can definitely see people open legal cases, which happened before.

[figmentofmyass]

Bitcoin Price Outperformed Crypto Hedge Fund Pantera Capital Last Month.

Sometimes it doesn’t pay to diversify — just ask cryptocurrency hedge fund Pantera Capital, whose fund underperformed the bitcoin price last month.

to be honest, that doesn't say much. hedge funds are generally much "bigger picture" than a one-month snapshot. pantera also outperformed bitcoin so far in 2018, which is more notable.

If I were to trade cryptocurrencies for a living, I'd invest in so-called "promising" altcoins only for short term and would close all positions after certain amount of time, regardless of the price, because in my mind any new alt is just a pump and dump / ICO scam, and in the long run there will be no fundamentals to support the price - promises of revolution, disruption and so on only can get the price so far, sooner or later everyone realizes that no real progress is being made.

altcoins are just for banging out doubles, 10x's and maybe the occasional 100x and taking profit in bitcoin. there might be some alts with long term staying power, but buying and holding is a real crapshoot.

i just accumulate as we head into (or during) alt season, and sell into pumps. and then i exit alts entirely once BTC takes over all the hype or bear market sets in. rinse, repeat.....