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Cryptocurrency hedge funds had an average return of 44% this year through December 20, rebounding from a 52% loss in 2022, ranking highest among the 29 strategies monitored.
They have survived a difficult 2022 and are experiencing recovery, and many are looking forward to a prosperous 2024.
Cryptocurrency hedge funds recover
Pantera Capital, led by industry veteran Dan Morehead, has experienced a strong rebound, with its liquid token fund soaring nearly 80% by mid-December. This comes after suffering an 80% slump in 2022. Similarly, Chainview Capital, overseen by 31-year-old Dan Slavin, doubled its performance from an 18% drop a year earlier.
Store Global LP, which specializes in altcoins, also achieved an impressive 268% return through November 30, according to founder Naveen Chaudhary, a former tech investment banker at Goldman Sachs Group.
While the average performance of crypto hedge funds has fallen short of Bitcoin’s more than 150% rally this year, the positive reversal is seen as positive news for an industry still recovering from challenges such as last year’s FTX collapse. ing. The fallout from FTX, redemptions, and banking challenges wiped out about a third of all crypto hedge funds.
However, despite this resurgence, average performance still lags Bitcoin’s impressive 2023 rally by about 120 percent. Additionally, the index falls short when compared to passive crypto funds, which have returned an average of about 265% over the past year.
Crypto hedge fund managers are optimistic about 2024
Greg Moritz, co-founder and COO of Alt-Tab Capital, expects the crypto market to move in a positive direction. He believes the economy will be boosted by a combination of macroeconomic and industry-specific factors, including stabilizing inflation, a shift away from Federal Reserve interest rate hikes, and the upcoming Bitcoin halving, which is expected to reduce the supply of cryptocurrencies. I expect it to be.
Chainview Capital founder Dan Slavin expressed optimism about the potential for a resurgence of token mania in the crypto market, similar to the mood three years ago when Bitcoin soared to all-time highs. said. As major tokens continue their upward trajectory, prospective investors will increasingly engage with fund managers and hedging strategies will remain cost-effective.
Slavin, who describes this year as a “dream,” has plans to expand his team and transform the existing “two-person play.” Pantera Capital’s Liquid Token Fund, led by Cosmo Jiang, is poised to ride the bull market in 2024, especially in altcoins. Historically, altcoins have outperformed in the later stages of market rallies following Bitcoin’s rise.
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