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The cryptocurrency markets are not ones to be trifled with. Insane leverage, double-digit percentage fluctuations in a single session, and the promise of 100x returns on many-an-obscure altcoin lead the masses to throw capital in the market, hoping for “moon” returns at the least and a “Lambo” as the ultimate reward.
But the market takes what it gives.
One fund manager learned it the hard, losing as much as $250,000 on March 12, 2020, a day when Bitcoin fell over 45 percent within hours and came to be known colloquially as “Black Thursday.”
Drawdowns and Strong Stomachs
Vlad Matveev, a 50-year-old Moscow resident, is a traditional market investor who turned towards digital assets for multifold returns. He invested funds with Cryptolab Capital, a so-called crypto “hedge” fund that touted a multi-strategy investment approach and double-digit returns for investors.
But events like “Black Thursday” and the coronavirus-induced market volatility caught just about any trading model unaware — leading to investors like Matveev losing 98.5 percent of their principal and left holding pennies. His ordeal with the fund was documented here.
Cryptolab has since folded its trading division. Cambrian Capital, another fund with a crypto-focused division, shut down after the turmoil but cited a shift to advisory services as a reason.
As Financial Times reports, crypto funds lost an average of 26 percent in March. The slump is succeeded only by a similar time in 2015, when Bitcoin-led markets fell almost 15 percent in one day.
(Chart showing the Bitcoin drop. » Read Full Article «