Crypto hedge fund went bankrupt after Bitcoin price dropped to 3,800 USD

Adaptive Capital – a cryptocurrency hedge fund, has just announced its closure of all operations after suffering heavy losses from the catastrophic plunge of the cryptocurrency market on March 13 – the time of witnessing prices. Bitcoin (BTC) fell to the lowest level of 2020 at $ 3,775. The VSCF has issued a letter to investors to notify the fund closure and return all remaining assets to them.

The Nebraska-based hedge fund previously recorded a 552.77% growth between October 3, 2018 and May 3, 2019. According to the company, a series of mechanical issues Infrastructure and location are the main causes of losses.

Although Adaptive Capital's letter did not mention any transaction points, BitMEX recently abruptly shut down for nearly an hour during a major sell-off on March 13, which prompted hedge fund operators. not promptly respond to the market.

BitMex then blamed a DDoS attack during the downturn that caused this issue.

“We have identified the root cause of two DDoS attacks at 02:16 UTC and 12:56 UTC, March 13, 2020.”

Did Adaptive Capital miss the signal?

Since the price fell from $ 10,500, Bitcoin's price action has been very bearish and the positive trend of this digital asset has been broken on February 26, when the daily candle could not close above $ 9,200. . This move has formed a head and shoulders pattern followed by a sharp drop for Bitcoin.

Daily chart of BTC / USD. Source: TradingView
Daily chart of BTC / USD. Source: TradingView

The ensuing massacre, including Adaptive Capital, caused Bitcoin to lose nearly 50% to reach a low of $ 3,775 – an unprecedented price since April last year.

Like many institutional investors, Adaptive Capital may have believed in Bitcoin's long-term price action on higher time frames. The evidence for this comes from an August 2019 tweet by Murad Mahmudov – a former Goldman Sachs analyst and chief investment officer at Adaptive Capital.

READ  Bitcoin price surpassed $ 10,400 when the futures market reached a 5-month high

In the tweet, Mahmudov pointed out how he is bullish with a prediction of the long-term target of $ 100,000.

“At first glance, this may seem like a weak push for the next week or so, but my intuition tells me that there is a steady accumulation occurring at these levels. Do not try to overcome yourself on short time frames, miniatures & big thoughts. In my opinion, BTC will reach $ 100,000. ”

A number of other cryptocurrency hedge funds are “dying”.

Private funds have become popular with traditional financial investors, especially in 2018, promoting many companies and projects today. For example, hedge funds like Alliance Capital come to venture capital funds like Digital Currency Group.

It is not uncommon to see traditional venture capital firms step deep into cryptocurrencies, which shows some degree of institutional demand for cryptocurrencies.

According to a PwC report in May 2019, there are 150 cryptocurrency hedge funds managing about $ 1 billion in assets, and despite the poor performance of many cryptocurrency hedge funds, there are still Many new funds were created after that. However, the number of new funds has now decreased by more than half compared to the previous year.

While the signal of institutions' need for cryptocurrencies and blockchain technology is there, this did not come true in 2019, and hedge funds suffered too much damage before they did. surrender. According to a December 2018 report from Crypto Fund Research, nearly 70 cryptocurrency hedge funds have ceased operations.

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According to CoinTelegraph
Translated by ToiYeuBitcoin

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