(Bloomberg) Hedge-fund star Mike Novogratz thinks he has crypto-currencies figured out. The one-time manager of Fortress Investment Group’s flagship macro fund is pinning his comeback hopes on digital coins. Their volatility is alluring when tranquil markets are depressing industry returns. But that can be a trap, as the investor well knows. The volatility of stocks in the S&P 500 Index, as measured by the VIX, last year averaged about half its level of 2008 and 2009, and is on track to set a record low this month. The result is painful for hedge funds, which rely on sharp market moves to make their bets pay off. Hedge Fund Research’s Fund Weighted Composite Index trailed the S&P 500 by five percentage points in the first eight months of this year.
Crypto-Currencies Can’t Salvage Hedge-Fund Junkies
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