With this years incredible gains in the price of bitcoin, the number of hedge funds with exposure to cryptocurrencies is exploding. Fund administrator MG Stover & Co, accounting firm Auther Bell, and law firm Cole-Frieman & Mallon alone have62 in the pipeline.

Also read:Hedge Funds Are Quietly Investing in Bitcoin

As the prices of bitcoin and other cryptocurrencies skyrocket, a large number of traders are seeking to launch hedge funds investing in them. Hedge Fund Alert recently reported that the number of hedge funds investing in digital currencies is exploding. The publication quoted CPA Corey Mclaughlin, managing member at Auther Bell, who said:

Ive been in the hedge fund space since 1998, and Ive never seen anything like it in volume of launches in a particular area. Its just crazy.

Matt Stover, founder of MG Stover & Co,shared the sentiment. This is the first time I can remember where we have had a hard time keeping up with the sales calls, he said.

Institutional investors are surprisingly interested in cryptocurrencies, according to hedge fund lawyer Karl Cole-Frieman. I wasnt expecting so many institutional players to be interested in the asset class, he was quoted saying. Recently, news.Bitcoin.com reported that hedge funds are quietly investing in bitcoin. With this years explosive gains in the price of bitcoin, Hedge funds that offer cryptocurrency exposure are seeing windfall gains.

Among client funds administered by MG Stover & Co., 12 of them are running digital-currency strategies. The firm has also made agreements to service 25 more, the publication detailed. Arthur Bell is working with about 15 fund managers on cryptocurrency funds and expects to take on 20 more in the near future. Meanwhile, Cole-Frieman & Mallon has helped set up 7 cryptocurrency funds this year and has 17 more in the pipeline. Altogether, 62 new cryptocurrency hedge funds will be brought the market by these three firms alone.

Among the new entrants, there are both those simply taking long bets on bitcoinas well as those devising hedge fund-like strategies, such as capturing the arbitrage among various currencies, the publication conveyed. Bitcoins value has risen over 200% this year.

I think the majority of these cryptocurrency [funds] are trying to ride the opportunity du jour, noted Neal Berger, founder of investment advisory firm Eagles View Capital. Its an access point for people who cant buy it themselves or dont want to learn how to do it.Former Goldman Sachs executive Matthew Goetz, co-founder at Blocktower Capital, described:

Its a wildly inefficient market where alpha potential is abundant more than anything weve seen in our careers. We think its a rare opportunity for investors. Its not often theres a new capital market being born in front of you.

How do you think the many hedge funds entering the space will affect the price of bitcoin? Let us know in the comments section below.

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Hedge Funds Investing in Cryptocurrencies 'Exploding' 62 in Pipeline - Bitcoin News (press release)