Tetras Capital, a New York-based cryptocurrency hedge fund, is shutting down and has already initiated the process of returning the investors’ money.
Citing “a person with direct knowledge of the matter,” Coindesk reported on this business closure on Tuesday.
The hedge fund was launched in 2017 and was focusing on investing in altcoins. It grabbed headlines as, in a Forbes interview, its co-founder Alex Sunnarborg revealed that he shorted Etheerum in May 2018, when the price of the digital asset was around $700. This turned out to be an excellent decision as the coin tumbled below $100 a year later.
Sunnarborg is a former Raymond James analyst and was managing the fund with Brendan Bernstein and Thomas Garrambone; both were former analysts with major investment banks, including JPMorgan, Goldman Sachs, and Deutsche Bank.
However, according to the recent report, the hedge fund was struggling to perform and lost 75 percent of its value since its launch.
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A filing with the US Securities and Exchange Commission (SEC) this year, shows that it has over 60 investors who pitched at least $100,000 each to the fund. At one point, the hedge fund was managing more than $33 million.
An end to crypto hedge funds?
When the crypto market was booming in 2017, many hedge funds spawned as investors were looking for a quick return. However, as the market went the other way in the next couple of years, these funds were forced to stop.
Just last week, Prime Factor Capital, the first UK-licensed crypto hedge fund, also shuttered as it was struggling to on-board investors. Another crypto hedge fund, Adaptive Capital, closed down in March.
In fact, according to a Crypto Fund Research report, as many as 70 crypto-focused hedge funds closed last year.
Despite Tetras Capital’s iconic short position on Ether, it could not survive in the market either.