The asset under management (AUM) of Polychain Capitals, a crypto-focused hedge fund, dropped from around $1 billion to mere $594.5 million in Q4 2018.
Though the recent filings submitted to the Securities and Exchange Commission (SEC) showed a significant decrease in number, a previous filing in August last year, reported the same number to be $967.8 million – a loss of $376.4 million in 8 months.
According to The Wall Street Journal, the drastic decline in numbers is primarily due to a fall in “the value of its holdings” forced by the bear market “rather than…redemptions by investors.”
Betting on companies is safer than betting on coins
Founded in 2016, Polychain Capitals grabbed headlines since its inception as it was founded by Olaf Carlson-Wee, the first employee of Silicon Valley-based Coinbase. The fund soon became one of the top and it focused its investments in tokens rather than companies.
However, the year-long slump in the market forced the firm to turn itself into venture capital and bet on blockchain projects in exchange for equities, earlier this year.
Though the San Francisco-based firm witnessed around 40 percent drop in its AUM between April and December last year, valuation of the cryptocurrency market in the same period went down by 50 percent, as seen on Coinmarketcap.com.
“There is no assurance that digital assets will maintain their long-term value in terms of purchasing power in the future, or that acceptance of digital asset payments by mainstream retail merchants and commercial businesses will grow,” the SEC filing noted.
Earlier this year, Pantera Capitals, one of the top blockchain-focused venture capital firms based in the Silicon Valley failed to raise its target amount for its third blockchain fund. The firm closed its fundraising attempts in March after .
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