Bloomberg analysts note rise in crypto-fund assets

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Over the past 12 months crypto hedge funds posted an average asset-value rise of 44%, rebounding from a 55% slump in 2022. This is reported by Bloomberg.

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According to Pantera Capital’s representative, the cash token fund grew nearly 80%. One of the firm’s largest positions is the token dYdX. The share of Bitcoin and Ethereum in the total is under 40%.

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Stoka Global, which invests mainly in altcoins, by November 30 had added 268%.

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Trend Reversal

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While the average hedge-fund return lags behind Bitcoin’s 150%, many market participants expect the trend to accelerate in the future.

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\”It looks like another token mania is coming. In many respects, 2023 was a dream year,\” said Dan Slavin, co-founder of Chainview Capital.

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Thanks to the positive momentum of the leading cryptocurrency, potential investors are again \”answering phone calls from fund managers, as hedging remains cheap,\” he added.

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Bloomberg journalists noted that the crypto fund index delivered the most impressive performance among the traditional strategies they track.

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Meanwhile, 250 of the 712 crypto funds in the Galaxy Digital VisionTrack index closed in 2023. For example, Galois Capital decided to wind down operations, as much of the firm’s funds were stuck on FTX.

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\”Firms that underperformed in 2022 faced a wave of redemptions in the first half of the following year,\” said analyst Bailey York.

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Trend Reversal

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However, the situation began to change in the second half of the year, as the crypto market rebounded thanks to the buzz around spot Bitcoin-ETF in the United States.

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Industry also breathed a sigh of relief after a court in November found FTX founder Sam Bankman-Fried guilty on all counts, noted Strix Leviathan co-founder Sadie Rainnie. She added that investor interest in crypto investment products has grown over time.

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Greg Moritz, head of Alt Tab Capital, spoke of 2% of the fund’s assets that were trapped on the collapsed exchange. The firm is currently in the process of pursuing its claims on the secondary market.

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Moritz expects that by year-end the assets under management by the firm will rise by about 30%.

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\”We are in a very aggressive position for the coming bull run. Overall, this year feels like a period of recovery,\” he stressed.

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In his view, the crypto market will gain momentum from a combination of macroeconomic and sector-specific events, including inflation stabilisation, the U.S. Federal Reserve’s pause in rate hikes, and Bitcoin halving.

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Earlier analysts noted the potential for the first cryptocurrency to reach $160,000 thanks to the same factors. According to CryptoQuant experts, the asset will rise to $54,000 after the ETF launch, and then higher on the backdrop of reduced miner rewards.

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As a reminder, in the period from 16 to 22 December inflows into crypto investment products amounted to $103 million.

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