U.S. hedge fund Adaptive Capital announced bankruptcy following the collapse of Bitcoin on a dark Thursday

Adaptive Capital, a U.S.-based cryptocurrency hedge fund, declared bankruptcy after suffering heavy losses during the dark Thursday cryptocurrency market crisis when Bitcoin prices fell to their lows. in 2020 at $ 3,775. The Fund has sent a letter to its investors notifying the closing of the fund and returning all remaining assets to the investors.

Hedge fund previously reported an increase of more than 552.77% between October 3, 2018, and May 3, 2019. According to the company, a series of infrastructure issues with the exchange were The main cause of the loss. The fund did not specify how much money it lost, but at least 50% to 90%.

Although the exchange was not mentioned in Adaptive Capitals' letter, it can be deduced which floor, BitMex did not work for nearly an hour during the big sell-off, leaving hedge fund executives to nothing. keep.

BitMex reported this and blamed a DDoS attack while the market collapsed.

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

Bitcoin traders have lost 1,220 BTC amid the panic of liquidation on BitMEX

Did Adaptive Capital fund miss a signal?

Since falling from $ 10,500, Bitcoin has been falling in price and the positive trend of digital assets seems to have been broken on February 26, when the daily candle failed to reach above $ 9,200. This has completed a head and shoulders pattern followed by a sharp downward move towards Bitcoin.

Daily BTC chart of USD Source: TradingView

The bloodshed that followed was unpredictable because no one, including Adaptive Capital, could predict a drop of up to 50%, bringing Bitcoin to nearly $ 3,775, an unprecedented price since April last year.

Like many institutional investors, Adaptive Capital may have longer Bitcoin price action on longer time frames in mind. The evidence for this comes from an August 2019 tweet from Murad Mahmudov, a former Goldman Sachs strategist and current chief investment officer at Adaptive Capital.

In the tweet, Mahmudov pointed out how he raised the price by predicting the $ 100,000 price target for Bitcoin in the long term:

At first glance, this may seem like a weak push for the next week or so, but my intuition tells me 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 thousand dollars per orangecoin.

Crypto funds are heavy losses

Crypto Funds have become popular with cryptocurrencies and traditional financial investors, especially in 2018, promoting many companies and projects available today. These typically range from hedge funds like Alliance Capital to venture capital funds like Digital Currency Group.

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

In a report published in May 2019, PwC estimates that in 2018, 150 active cryptocurrency hedge funds managed $ 1 billion in assets, however the number of new funds was created. out now by more than half in 2019 compared to the previous year.

Despite the signal of the organization's need for cryptocurrencies and blockchain technology, this did not come true in 2019 because hedge funds cannot take too much damage. According to a December 2018 report from Crypto Fund Research, nearly 70 cryptocurrency hedge funds have ceased operations.

The SEC rejected the Bitcoin ETF

Meanwhile, trading funds continue to witness the U.S. Securities and Exchange Commission (SEC) rejection amid concerns that the Bitcoin market is simply too vulnerable to being manipulated. Most recently, the SEC rejected another ETF submission by Wilshire Phoenix. The NY-based company was hoping to counter Bitcoin volatility by putting US Treasury bonds into the basket.

As the corona virus situation becomes more and more complex, it's difficult to say how hedge funds and other players will cope, but even as traditional safe-haven assets like gold continue. Failure, Bitcoin can find itself a whole new paradise or hell.

Thạch Sanh

According to Cointelegraph

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