Crypto hedge fund traders were not immune to bitcoin’s downright frigid bear market. Just look at Polychain Capital, whose assets under management (AUM) fell to $591.5 million at year-end 2018, according to a regulatory filing cited in the Wall Street Journal.
Investors Stay Put in Polychain Capital’s Fund
The San Francisco-based crypto hedge fund boasted $1 billion in assets as of February 2018, which in addition to cryptocurrency included unspent cash pledged by investors and equity holdings in companies, Fortune reports.
The value of Polychain’s AUM, however, tumbled nearly 40% between April and December 2018 when the bear market gripped bitcoin. Importantly, Polychain’s AUM shrunk due to a drop in the “value of its holdings,” not because of investor withdrawals, the filing points out. The decline was also less severe than the broader crypto market, whose “aggregate value” narrowed by 70% in the same period.
Crypto Hedge Fund Suffers a Bitcoin Bear Market Casualty
Polychain, which is led by Olaf Carlson-Wee, entered the crypto hedge fund market in 2016. It was one of the earliest funds to invest in cryptocurrency instead of company equity.
The firm oversees five funds: Polychain Ventures, Dfinity Ecosystem Fund, Polychain Master Fund, Polychain Master Fund II, and Polychain Opportunities Fund I.
Meanwhile, Polychain’s weak performance in 2018 didn’t come without any casualties, reportedly costing founding principal Ryan Zurrer his job, according to The Block.