The classic buy-and-hold, or HODL, approach to Bitcoin (BTC) outperformed the majority of crypto funds by 68.8% in the first half of 2023 (H1).
According to Swiss-based investment advisor 21e6 Capital AG, crypto funds generated returns of 15.2% on average in the first half of 2023 (January 1 to June 30), compared to the roughly 84% price surge that BTC saw in 2023’s same Period.
Crypto funds returned an average of 15.2% in the first half of 2023 lol pic.twitter.com/vb8pwYfiX9
— Alex Kruger (@krugermacro) August 5, 2023
Maximilian Bruckner, head of marketing at 21e6 Capital AG, emphasized the importance of this in an Aug. 2 semi-annual report, stating that crypto funds “have often been able to significantly outperform Bitcoin in previous bull runs.”
Bruckner attributed much of crypto funds’ disappointing performance in 2023 to challenging market conditions and the significant amount of cash they had at the end of 2022.
After the implosion of FTX and many other crypto projects over the past year, the report suggested that many crypto funds have opted to take risk off the table and build cash buffers, leading to a significant BTC price rally in the first half of the year missed 2023.
“Funds with large cash holdings will underperform Bitcoin in a bull market unless the funds’ assets significantly outperform Bitcoin.”
“Due to the overall sentiment that lingered into late 2022, many funds had larger than average cash holdings. In addition, most major altcoins also underperformed Bitcoin – a difficult environment for funds,” the report adds.
Directional fund strategy comparison H1 2023. Source: 21e6 Capital AG.
At the time of writing, BTC is priced around $29,000 as it continues to struggle to hold above $30,000, which has only been briefly breached a couple of times this year.
Related: Price Analysis 8/4: BTC, ETH, BNB, XRP, DOGE, ADA, SOL, MATIC, LTC, DOT
Still, the current prices mean a 75% price increase for the asset since Jan. 1, according to CoinGecko data.
“All crypto fund strategies produced positive results this year. But relative to Bitcoin, they underperformed, particularly those with significant exposure to altcoins, futures or those heavily reliant on momentum signals.”
“In the future, we will closely monitor which exchanges will establish themselves as leading futures providers. Additionally, the level of funding rates in the crypto futures markets and the ability of quantitative funds to spot trends will be areas of focus in our monitoring of the markets,” the report adds.
Finally, the report highlighted that investor sentiment improved slightly in the first half of 2023, suggesting that some funds could soon start pouring more money into the crypto sector.
However, it noted that recent data on inflows and outflows suggests that a “full recovery in sentiment” has yet to happen.
Comparison of non-direction crypto fund strategy in the first half of 2023. Source: 21e6 Capital AG.
Magazine: “Elegant and backward”: Jameson Lopp’s first impression of Bitcoin
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.