Crypto hedge funds have generated an average return of 44% this year as of December 20, marking a recovery from a loss of 52% in 2022, ranking as the best strategy among 29 strategies are tracked.
They have weathered a challenging 2022 and are on the road to recovery, and many are looking forward to a prosperous 2024.
The resurgence of crypto hedge funds
Pantera Capital, led by industry veteran Dan Morehead, has experienced a significant recovery, with its liquid token fund increasing by nearly 80% in mid-December. This comes after an 80% decline. in 2022. Similarly, Chainview Capital, managed by Dan Slavin, doubled its performance after falling 18% in the previous year.
Stoka Global LP, which specializes in altcoins, also posted an impressive 268% gain through November 30, according to founder Naveen Choudary, a former technology investment banker at Goldman Sachs Group Inc.
While the average performance of crypto hedge funds has failed to keep up with Bitcoin’s more than 150% gain this year, the positive reversal is seen as boding well for a sector still recovering from the challenges, including the collapse of FTX the previous year. The fallout from FTX, redemptions and banking challenges led to the collapse of about a third of all crypto hedge funds.
Crypto hedge fund managers optimistic about 2024
Greg Moritz, co-founder and COO of Alt-Tab Capital, predicts a positive trajectory for the cryptocurrency market. He predicts the momentum is driven by a convergence of macroeconomic and industry-specific factors, including stabilizing inflation, the US Federal Reserve shifting away from interest rate hikes, and Bitcoin halving upcoming, which is expected to reduce the cryptocurrency supply.
Dan Slavin, founder of Chainview Capital, expressed optimism about the possible revival of token mania in the cryptocurrency market, drawing parallels with the mood experienced three years ago when Bitcoin rose to highs record. As the flagship token continues its upward trajectory, potential investors increasingly engage with fund managers and hedging strategies remain cost-effective.
Describing this year as a “dream”, Slavin plans to expand his team, changing the existing “two-man program”. Pantera Capital’s liquid token fund, led by Cosmo Jiang, positions itself for upside in 2024, especially with altcoins. Historically, altcoins have performed better in the later stages of market recoveries following Bitcoin’s breakout.
