AssetsAug 08, 2023

Bitcoin (BTC) outperformed hedge funds in 2023

Hedge funds based on digital currencies have faced a number of problems.

According to the latest data provided by the renowned Swiss investment advisor 21e6 Capital AG, approximately 13% of hedge funds based on digital currencies were closed in 2023. The reasons behind this state of affairs were insufficiently satisfactory results, as well as problems with access to services offered by traditional banking.

BTC in 2023 brought better results than hedge funds

More recently, Maximilian Bruckner, marketing and sales manager at 21e6, noted that many hedge funds whose investment strategy relies on cryptocurrencies are still having significant difficulties finding new and long-term partner partners for banking services.

The problems mentioned above were compounded by the collapse of big banks that were crypto-friendly – Silvergate Capital and Signature Bank. These events took place earlier this year. Fuel to the fire was also added to the endless regulatory pressure in the United States, which often unjustifiably targets the digital currency sector.

As a result of the reasons described above, as many as 97 out of 700 hedge funds based on the virtual currency sector that are tracked by the aforementioned analytical company were closed during 2023. Several of them closed immediately after the collapse of FTX, where many investors stored their cryptocurrency funds.

Although hedge funds from the crypto industry achieved positive results during 2023, they were unable to beat Bitcoin in terms of percentage returns. It is worth noting that although investor confidence has improved significantly in recent months, the industry still has a lot to improve.

Current situation in the cryptocurrency sector

Top virtual currencies continue to trade sideways. Bitcoin is trading around $29,000 per coin and Ethereum is trading above $1,800. In the last 24 hours, both of these cryptocurrencies have experienced minor price changes. The fluctuations are also not visible from the perspective of the last week.