As many as 70 crypto-focused hedge funds closed down this year as institutional turn out to the sector remains on the lower side.

Reported by Bloomberg on Wednesday, the funds mostly catered to pensions, family offices, and wealthy individuals. Moreover, according to Crypto Fund Research, a San Francisco-based market analytics firm, the number of new funds started in 2019 remains less than half of the new funds initiated the previous year.

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“The market is definitely retail driven and will remain so for the foreseeable future,” said Nic Carter, co-founder of Boston-based crypto market tracker Coin Metrics.

America leading the way

Hedge funds based in North America led the group with the shut down of 28 funds followed by Europe with the count as high as 23. 14 hedge funds in the Asia-Pacific region and three in other regions also shut their operations.

The report outlined that institutional attention on the sector was expected to soar with the introduction of the Bitcoin futures instrument by CME Group in 2017 and Bakkt this year. Though CME’s daily volume this year averaged about 32,500 Bitcoins or $236.8 million at current prices, the figure is relatively less compared to the numbers reported by the unregulated platforms overseas territories.

“It’s not a stampede by any stretch, but people are all doing their work,” said Mike Novogratz, chief executive officer of Galaxy Investment Partners LLC. “The next wave will come from the wealth advisers, maybe with endowments and small foundations participating.”

The number of new crypto hedge funds peaked in 2017 at 291, while in 2018, 284 new funds initiated, according to Crypto Fund Research.

“Taking a step back, I think some would argue that the levels of institutional adoption are disappointing or underwhelming but, of course, this view depends entirely on expectations,” Spencer Bogart, general partner at Blockchain Capital LLC, told Bloomberg. “To me, the fact that there is any institutional adoption for Bitcoin only 10 years into existence is a radical success and beyond what anyone could have imagined just 3 or 4 years ago.”