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- Bitcoin price gained nearly 80 percent during the first half of 2023 while most crypto hedge funds returned between 10-20 percent during the same period.
- A report by 21e6 Capital shows funding rates on crypto derivatives are still relatively low compared to the pre-FTX period.
The cryptocurrency market has undeniably disrupted the traditional investment industry that was mostly accessible to few investors. The highly decentralized aspect of the crypto market has helped onboard hundreds of millions of global investors during the first decade of its existence.
Resultantly, market experts believe mainstream adoption of the cryptocurrency industry will happen in the next few coming years. Moreover, more crypto-related regulations from around the world have entered the digital asset space in the past year than any other annual calendar.
Additionally, the subject of digital assets is expected to play a crucial role in next year’s presidential election in the United States with more than three candidates already using Bitcoin to accept donations.
Closer Look at Bitcoin vs Crypto Hedge Funds in 1H2023
Despite the subject of cryptocurrency dominating most global investors, Bitcoin remains the undisputed digital asset. According to a recent market report released by 21e6 Capital, a Swiss-based crypto investment advisor, on crypto fund performance in the first half of 2023, Bitcoin significantly outperformed most hedge fund managers. Interestingly, the report highlighted that at least 13 percent of crypto hedge fund managers closed down during their operations during the first half of 2023 due to a lack of proper backing.
Furthermore, Bitcoin recorded more than 77 percent in gains during the first half of the year compared to an average return of 15 percent from crypto hedge fund managers.
Crypto hedge funds suffer from lagging performance to Bitcoin and a set of operational difficulties, such as accessing banking services.
About 13% of them shut down this year, according to data tracked by 21e6 Capital. 1/https://t.co/L7ozmXW1G4 @crypto
— Yueqi Yang (@Yueqi_Yang) August 4, 2023
The report further highlighted that the collapse of FTX and Alameda Research late last year significantly affected the performance of most crypto hedge fund managers during the first half. Moreover, crypto fund inflows and fund launches have remained relatively low YTD, thus signaling a minimal recovery rate. The report concluded.
All crypto fund strategies achieved positive results this year. But relative to Bitcoin, they underperformed, especially those with significant exposure to altcoins, to futures, or those strongly dependent on momentum signals.
Onwards, the report highlighted that the level of the funding rates in crypto futures markets and the ability of quantitative funds to capture trends will be crucial in which exchanges will establish themselves as the winner in the futures industry.
Market Outlook
The cryptocurrency market has remained relatively calm with few outliers. Bitcoin price continued to hold a crucial support level of around $29k on Monday, with most experts calling for a further decline in the coming weeks towards $24k.
Similarly, Ethereum (ETH) price continued to hold a crucial support level of around $1830, with a possible market correction in the coming weeks. Nonetheless, some altcoins led by Shiba Inu (SHIB) have registered notable gains in the past few days fueled by the Shibarium launch hype.
