Crypto Hedge Funds Struggle to Keep Up with Bitcoin's 120% Surge by 2024

Many cryptocurrency hedge funds achieved double-digit returns in 2024, according to the Galaxy Vision Trac Composite Index. Still, these gains fall short compared to the progress made by leading cryptocurrencies.

Some hedge funds strive to differentiate themselves through proprietary or innovative investment strategies that don’t always involve buying the largest digital currency. This means that those who did not invest in Bitcoin missed out on its record-breaking returns.

David Kalk, founder and CIO of Reflexive Capital, said: “2024 is a challenging year for many crypto funds because it is the year of Bitcoin and memecoin - these are the best assets and everything else is Falling behind.

David Jeong, CEO of Tread.fi, an algorithmic crypto trading platform for institutional investors, believes that it is difficult for crypto hedge funds to outperform Bitcoin because “these things are really hard to time.”

Still, hedge funds focused on directional and quantitative strategies in the digital asset space performed best on average last year, according to Vision Trac data.

The Vision Trac Quantitative Directional Index rose more than 53% during the same period, and the Vision Trac Fundamental Index rose more than 40%. The Vision Trac Market Neutral Index rose about 18.5%.

Galaxy Digital’s Alpha Liquid Fund gained 76.6% in 2024, according to a person familiar with the matter.

David Tawil’s ProChain Master Fund, a multi-strategy cryptocurrency fund, is up about 70% last year. That number surged 80% in 2023, thanks to large positions in large-cap tokens like Bitcoin.

Based on in-depth research on tokens or blockchain technology, the fundamental research and macro fund of crypto asset tron belief, according to people familiar with the matter, San Francisco-based Reflexive Capital has a net return of 106% in 2024.

Tephra Digital Asset Fund LP, led by former Wall Street professionals Ryan Price and Raghav Chopra, had a total return of about 100% by the end of the year, compared with 41% the year before, according to a December letter to investors dated Jan. 6. .

According to Galaxy data, most of the gains for cryptocurrency hedge funds occurred in the last quarter of 2024. Once a cryptocurrency skeptic, D-N.Y. President-elect Donald Trump has become one of the industry’s most outspoken supporters. His victory in the US presidential election propelled Bitcoin and other cryptocurrencies to new heights. What adds color to Bitcoin is the successful launch of direct investment in Bitcoin by the United States.