PricewaterhouseCoopers (PwC), a professional services network with a global footprint, has released the ‘2019 Crypto Hedge Fund Report’ which has effectively exposed what hedge funds were doing during last year’s Bitcoin bear market.

Instead of panicking, the report recorded, wealthy investors and hedge funds were busy accumulating Bitcoin at low prices.

As per the report:

“The average AuM (Assets under Management) of the funds …surveyed was US$21.9 million. The Median AuM at fund launch was US$1.2 million, and the median launch date was January 2018, which indicates that the funds surveyed have been relatively successful in fundraising, especially considering that the Bitwise 10 index has fallen approximately 75% over this period. This also applies to market-neutral funds.”

From the above revelation, the new capital was pumped into hedge funds despite the bears coming out of the woods in packs. Additionally, PwC noted that assets worth US$ 1 billion were spread across 150 crypto hedge funds with few controlling assets worth above US$10 million.

However, it was not all rosy, and losses were incurred. The report continued to note that the majority of fund managers surveyed admitted to using Bitcoin as their benchmark.

“Therefore, it can be argued that these managers did manage to outperform their benchmark and add some alpha. With a beta coefficient of 0.82 to Bitcoin, the median fund’s return is closely linked to the movement in the price of Bitcoin.”

From the report, most crypto hedge fund managers are located in the United States followed by the Cayman Islands. On the contrary, 55% of the funds are domiciled in the Cayman Islands followed by the United States at 17%.

The momentum around crypto hedge funds in 2018 crossed over to 2019. For instance, on May 13, Grayscale said:

“Capital inflows rebound: In the first Q of 2019, Grayscale raised $42.7 million into its single-asset and diversified investment products, marking a 42% increase in a quarter-over-quarter product inflows.”

Product inflows to the Grayscale Bitcoin Investment Trust increased by roughly US$12 million; from US$30.1 to US$42.7 at the end of the first quarter of 2019.