Tetras Capital Shuts Down Crypto Hedge Fund After 75% Loss

Tetras Capital, once a $33 million crypto hedge fund, is shutting down due to negative returns.

Jul 28, 2020 at 1:20 a.m. UTC
Updated Sep 14, 2021 at 9:36 a.m. UTC

Cryptocurrency hedge fund Tetras Capital is calling it quits.

  • The New York-based fund is shutting down and returning investors’ money after quarters of low returns, according to a person with direct knowledge of the matter who spoke to CoinDesk on condition of anonymity.
  • The fund struggled to perform and posted about a 75% loss life-to-date since opening in 2017, the source said. 
  • Tetras Capital managed upwards of $33 million at one point for more than 60 investors who pitched in at least $100,000 apiece, according to financial filings.

Tetras Capital’s closure adds to a growing line of cryptocurrency hedge funds folding after crypto prices slid from peak highs in 2017. 

  • According to a Crypto Fund Research report, at least 68 crypto hedge funds closed last year internationally, almost double the number – 35 – in 2018.

The fund launched in 2017 with a focus on altcoins, Tetras Capital co-founder Alex Sunnarborg said in a 2019 Forbes interview

  • Alternative cryptocurrencies, or altcoins, are digital assets other than bitcoin.
  • One altcoin trade Tetras claimed to have made was a short position on the cryptocurrency ether at a price of $700 in May 2018, according to the interview and a fund investment report.
  • The short view appears to have been the right call, as ether tumbled below $100 last year and has lately been trading in the $200 range.
  • Sunnarborg, a former Raymond James and CoinDesk analyst who sold crypto-asset market research app Lawnmower to this news publication, managed Tetras Capital with partners Brendan Bernstein and Thomas Garrambone. 
  • Bernstein and Garrambone have worked as analysts for a number of investment banks, including Goldman Sachs, JPMorgan, Deutsche Bank and Torreya Partners.

Requests for comment from Tetras Capital, Sunnarborg, Bernstein and Garrambone were not returned by press time.

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