Starting a hedge fund now is probably like starting one in 2016.
I wasn't aware there were such things, but I agree with you about the above. I'm not sure if we're starting another huge bull market or not, but bitcoin and altcoins are both up quite a bit compared to where the market's been the past two years.
I don't know what crypto hedge funds do exactly (aside from holding/trading coins), but starting one now might be a bad idea but if someone had started one in 2018-19 they might be poised to make some decent money. Not sure how many people would have had the intestinal fortitude to do so after everything looked dead for a long time--especially the altcoin market.
Oh yeah, there were a good few of them that had actually started up before crypto boomed. Only one that I know off hand is TAAS. They shut down sometime ago, though they used customer funds to manage a portfolio of crypto assets and returned profits to the owners of the their coin -- TAAS -- and they took a share of the profits for handling all the security, smart contracts (on ETH), etc.
Starting one is going to be a regulatory nightmare in my mind, you're going to have to get licenses in the US (and not sure how this works, but maybe every state in the US), other countries, etc. Then you can start, you have to setup a good deal of cold storage, security on your website for deposits and withdrawals. This is going to be a very involved process.
Plus you're not just going to let customers withdraw their funds without any sort of issue -- like a real hedge fund, you'd have to make them wait a few days so you can ensure you have the amount of BTC/ETH/whatever coin they request their withdrawl in.
Sounds like a great idea right off the bat, but your customers are only going to want to pay you if you make them profit. Which you can't control at all. This is literally the wild west.