Crypto Hedge Funds Rise From The Ashes: 3 Industry Leaders Touting Significant Gains

Author: Murtuza Merchant | December 28, 2023 11:00am

The cryptocurrency hedge fund industry is witnessing a robust recovery from a challenging 2022.

Here are the industry leaders reporting significant gains this year:

• Pantera Capital's liquid-token fund, managed by Dan Morehead, saw an 80% increase as of mid-December, following an 80% drop in 2022, Bloomberg reported.
• Chainview Capital, managed by 31-year-old Dan Slavin, has seen its fortunes double following an 18% decline last year.
• Stoka Global LP, primarily investing in alternative coins, reported a 268% gain as of Nov. 30, according to founder and former Goldman Sachs banker Naveen Choudary.

The turnaround is a positive sign for an industry still reeling from the collapse of FTX (CRYPTO: FTT).

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“It’s looking like there’s going to be another token mania coming,” Slavin said, recalling the market atmosphere similar to three years ago before Bitcoin's surge to record highs.

According to Bloomberg Indexes, cryptocurrency hedge funds have averaged a return of 44% this year through Dec. 20, a significant recovery from a 52% loss in 2022.

These funds still trailed Bitcoin’s performance by about 120 percentage points and were outperformed by passive crypto funds, which saw an average return of about 265%.

The resilience of these funds is noteworthy, especially considering the recent closure of about 250 out of 712 crypto hedge fund firms. Galois Capital, for example, shut down their flagship funds this year. The firm, known for its stance against the Luna (CRYPTO: LUNA) coin, was entangled with the bankrupt FTX.

But the crypto markets rebounded partly due to anticipated U.S. approval of the first spot Bitcoin ETFs.

Pantera is positioning itself for growth with altcoins, anticipating that they historically outperform in the latter stages of a market rally. Cosmo Jiang, a portfolio manager with the firm, emphasized the importance of token selection in this phase of the cycle.

Some funds, like Alt Tab Capital, are preparing aggressively for the anticipated bull run.

Co-founder and COO Greg Moritz expressed optimism, citing macroeconomic factors and industry-specific developments like Bitcoin's halving as potential catalysts for market growth.

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Image: Gerd Altmann from Pixabay

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