Cryptocurrency Hedge Funds Poised for Strong 2024 Recovery

Amid last year's crypto winter, hedge funds are gearing up for a robust 2024. While not matching Bitcoin's 150% rally, a positive industry shift is evident.

Hedge Funds Stage Comeback

Crypto hedge funds rebounded, boasting a 44% average return by December 20, recovering from a 52% 2022 loss. Though lagging Bitcoin's 2023 gain, this marks the best among 29 tracked strategies.

Survival Amid Challenges

Facing FTX's collapse, the crypto hedge fund landscape saw 250 closures of 712 tracked firms. Notable closures include Galois Capital, entangled with the bankrupt FTX.

Dynamic Industry Shift

Galaxy VisionTrack notes a reversal in struggling firms' fortunes. Redemptions in H1 2023 turned positive in H2, coinciding with market rebound and anticipation of the US approving spot Bitcoin ETFs.

Legal Win Fuels Growth

Grayscale's legal win in August for its Bitcoin ETF pushed fundraising, attracting new managers in global hubs. This legal breakthrough hints at industry expansion.

Gearing Up for a Strong 2024

Pantera Capital's TurnaroundPantera

Pantera Capital, led by Dan Morehead, sees an 80% surge in its liquid-token fund, rebounding from an 80% decline in 2022.

Chainview Capital's Success

Chainview Capital, managed by Dan Slavin, doubled performance post-18% decline, foreseeing another token mania.

Altcoins Steal the Spotlight

Stoka Global LP, focusing on altcoins, records a remarkable 268% gain by November 30, showcasing altcoins' potential.

Hedge Funds Eye Altcoins for 2024 Success

Strategic Shift

Pantera Capital focuses on altcoins, aligning with historical altcoin outperformance in market rallies.

Interview Insights

Cosmo Jiang of Pantera emphasizes altcoins' strong potential in upcoming market conditions, with less than 40% portfolio exposure to Bitcoin and Ether.

Diversified Holdings

Pantera's notable holdings include dYdX, highlighting a diversified approach beyond Bitcoin and Ether.

Anticipating a Positive Outlook

FTX Fallout and Redemption Surge

FTX's collapse led to one-third of crypto hedge funds shuttering. Survivors anticipate a strong 2024, buoyed by rising Bitcoin prices and potential approval of ETFs directly investing in crypto tokens.

Optimism Amid Challenges

Despite challenges, surviving firms remain optimistic, anticipating a positive turn with potential regulatory approvals.

While the industry rebounds, challenges persist. The survival of firms signals resilience, but caution is warranted amid regulatory uncertainties.