The post Cryptocurrency Hedge Funds Gearing for Strong 2024 after Last Year’s Crypto Winter appeared on BitcoinEthereumNews.com.

While the average performance of crypto funds did not match the more than 150% rally in Bitcoin this year, the positive shift in fortunes is a promising development for the industry. After facing a strong crypto winter in 2022 following the collapse of Three Arrows Capital (3AC), crypto hedge funds are making a comeback. Crypto hedge funds demonstrated a notable recovery, posting an average return of 44% by December 20, bouncing back from a 52% loss in 2022, according to a Bloomberg index monitoring their performance. Although this performance marked the best among 29 tracked strategies by Bloomberg, it lagged behind Bitcoin’s 2023 gain by approximately 120 percentage points. The index also fell short of passive crypto funds, which recorded an average return of around 265% in the past year, as per mid-December data from CoinShares. Photo: Bloomberg Survival in the crypto hedge fund landscape, which faced challenges such as the collapse of FTX, was a significant accomplishment. Of the 712 tracked crypto hedge-fund firms by Galaxy Digital’s VisionTrack, around 250 shut down over the past year and a half. Galois Capital, known for its stance against the Luna token before its 2022 collapse, closed its flagship fund this year, with almost half its assets entangled with the bankrupt FTX. Bailey York, tracking crypto hedge fund data at Galaxy’s VisionTrack, noted a shift in the industry dynamics. Firms that struggled in 2022 experienced substantial redemptions in the first half of the year. However, this trend began to reverse in the second half, coinciding with the rebound in crypto markets, partly driven by the anticipation of the US approving its first spot Bitcoin ETFs. Grayscale Investments LLC’s legal victory in August for its Bitcoin ETF push was a significant development. Fundraising for active funds saw an uptick, and new fund managers…

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Filed under: News - @ December 28, 2023 12:12 am