Crypto Hedge Funds Had Returned An Average Of 44% In 2023

Key Points:

• After a tough 2022, crypto hedge funds are making a strong comeback with an average 44% return by December 20.
• Despite closures affecting 250 out of 712 funds, some, like Pantera Capital and Chainview Capital, are not only recovering but thriving.
• Resilient funds are eyeing a positive 2024, fueled by optimism around potential US approval for Bitcoin ETFs.

After enduring a tumultuous 2022, crypto hedge funds are staging a remarkable comeback, with many anticipating a robust 2024.

Read more: Man Group Will Launch Crypto Hedge Fund Despite Difficult Market Circumstances

Crypto Hedge Funds Rally with Strong 2022 Recovery

According to Bloomberg, crypto hedge funds had posted an average return of 44% by December 20, bouncing back from a disheartening 52% loss in 2022. Passive crypto funds have fared even better, boasting an average return of approximately 265% over the past year.

The resurgence comes amid a challenging period for the industry, marked by the closure of 250 out of 712 crypto hedge funds in the last 18 months. Despite the overall positive trend, not all funds have mirrored Bitcoin‘s over 150% rally this year. Nonetheless, the reversal of fortunes is a welcome development for an industry still recovering from the collapse of FTX last year, which led to the demise of approximately one-third of all crypto hedge funds.

Prominent players like Pantera Capital‘s liquid-token fund have shown impressive recovery, surging nearly 80% this year after an 80% setback in 2022. Chainview Capital, led by Dan Slavin, has doubled its performance following an 18% decline in the previous year.

The aftermath of FTX’s downfall is still visible, but some funds are overcoming the scars left by the incident. Greg Moritz, co-founder and COO of Alt Tab Capital, shared that despite having 2% of assets stuck on the platform, the fund is in the process of liquidating its claim on the secondary market.

As the industry rebounds, these resilient funds are gearing up for a promising 2024, fueled by optimism around the potential approval of US exchange-traded funds directly investing in Bitcoin, which has maintained an elevated price.