🔻[Analysis] Why 90% of Crypto Funds will fail - David Nage

Even traditional hedge funds have short life spans and are prone to failure. According to Nage crypto funds are no different. The majority of funds in the space are small, with $50 million or less in assets, meaning that losses can impact a fund more than if it were large, especially with more aggressive management. Managing risk can be difficult as professional tools are only starting to reach the space, and many managers may have not yet adapted to markets that do not behave like traditional ones. Finally, the relatively small number of quality and liquid investments can lead to concentration risk in portfolios exposing managers to losses with the decline of only one asset. While 90% of funds may fail, 10% will succeed, and Nage recommends managers focus on transparency and communication with LPs to help create a lasting fund.