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Crypto News

Bitcoin Continues to Rule While Crypto Hedge Funds Fail

Author

Jay Solano

Tags

Reading time

1 min
Last update

Author

Jay Solano

Tags

Reading time

1 min
Last update

Author

Jay Solano

Tags

Reading time

1 min
Last update

bitcoin

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21e6 Capital said that Bitcoin outperformed crypto hedge funds in the first half of the year.

According to 21e6 Capital, a Swiss crypto investment adviser, bitcoin (BTC) was a better investment than crypto hedge funds in the first half of 2023.

According to Bloomberg data from 21e6 Capital, crypto funds returned 15% while bitcoin gained 83%. In stormy markets, market-neutral strategies frequently try to follow market trends, but funds with directional strategies averaged 22%, significantly below Bitcoin.

The funds struggled against the sudden closure of multibillion-dollar crypto exchange FTX in November, the closure of three crypto-friendly banks earlier this year and the continued turbulence around potential regulations.

The funds battled with the November collapse of multibillion-dollar crypto exchange FTX, the closure of three crypto-friendly banks earlier this year, and regulatory uncertainty.

“A buy-and-hold bitcoin investment would have outperformed all of these fund baskets. In the study, 21e6 Capital due diligence manager Jan Spörer and sales and marketing head Maximilian Bruckner said Bitcoin gained 80% by midyear. Crypto hedge funds often outperformed the bitcoin benchmark during bull markets. How can professional crypto funds underperform so often?

The complex answer is that crypto hedge funds went into the year with larger-than-typical cash positions to reduce risks after FTX’s crash, slowing reaction times. Hedge funds also suffered from cryptocurrency underperformance.