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Bitcoin Remains King While Crypto Hedge Funds Get Rekt
Even though crypto hedge funds managed positive returns during the first half of the year, bitcoin trounced them, according to a 21e6 Capital report.
Updated Aug 7, 2023, 5:48 p.m. Published Aug 7, 2023, 2:14 p.m.
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Investors would have benefited more from buying and holding bitcoin (BTC) than from investing in crypto hedge funds during the first half of 2023, according to a research report from Swiss-based crypto investment adviser 21e6 Capital.
Crypto funds returned an average of 15% during the period versus an 83% gain for bitcoin, according to 21e6 Capital data provided to Bloomberg. Funds with directional strategies returned an average of 22%, well below bitcoin but above the 6.8% return on market-neutral strategies that often attempt to follow market trends, a difficult proposition in choppy markets.
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The funds struggled against the sudden closure of multibillion-dollar crypto exchange FTX in November, the closure of three crypto-friendly banks earlier this year and the continued turbulence around potential regulations.
“It is plain to see that a simple buy-and-hold investment into bitcoin would have outperformed all of these fund baskets. Bitcoin added about 80% in value by the half of the year,” 21e6 Capital due diligence manager Jan Spörer and sales and marketing head Maximilian Bruckner wrote in the report. “In previous bull runs, crypto hedge funds were frequently able to significantly outperform the bitcoin benchmark. How can underperformance among professionally managed crypto funds be such a widespread phenomenon?”
The complex answer involves the fact that crypto hedge funds went into the year with larger-than-typical cash positions to help mitigate risks after the collapse of FTX, which made reaction times slower. The underperformance of altcoins — or cryptocurrencies not named bitcoin or ether (ETH) — also took a toll on hedge funds.
21e6 Capital tracks more than 700 crypto funds globally as well as the regulatory performance reports of 123 funds across 70 firms. The underperformance has led to the closure of about 97, or 13%, of those crypto hedge funds, according to the Bloomberg data. One example is crypto investment firm Galois Capital, which announced its closure in February because of its heavy exposure to FTX. Other hedge funds shut down underperforming funds.
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KuCoin captured a record share of centralised exchange volume in 2025, with more than $1.25tn traded as its volumes grew faster than the wider crypto market.
What to know:
- KuCoin recorded over $1.25 trillion in total trading volume in 2025, equivalent to an average of roughly $114 billion per month, marking its strongest year on record.
- This performance translated into an all-time high share of centralised exchange volume, as KuCoin’s activity expanded faster than aggregate CEX volumes, which slowed during periods of lower market volatility.
- Spot and derivatives volumes were evenly split, each exceeding $500 billion for the year, signalling broad-based usage rather than reliance on a single product line.
- Altcoins accounted for the majority of trading activity, reinforcing KuCoin’s role as a primary liquidity venue beyond BTC and ETH at a time when majors saw more muted turnover.
- Even as overall crypto volumes softened mid-year, KuCoin maintained elevated baseline activity, indicating structurally higher user engagement rather than short-lived volume spikes.
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Gold tops $5,000 as bitcoin stalls near $87,000 in widening macro-crypto split: Asia Morning Briefing
Bitcoin’s onchain data points to supply overhang and weak participation, while gold’s breakout is priced by markets as a durable macro regime shift.
What to know:
- Gold’s surge above $5,000 an ounce is increasingly seen as a durable regime shift, with investors treating the metal as a persistent hedge against geopolitical risk, central bank demand and a weaker dollar.
- Bitcoin is stuck near $87,000 in a low-conviction market, as on-chain data show older holders selling into rallies, newer buyers absorbing losses and a heavy supply overhang capping moves toward $100,000.
- Derivatives and prediction markets point to continued consolidation in bitcoin and sustained strength in gold, with thin futures volumes, subdued leverage and weak demand for higher-beta crypto assets like ether reinforcing the cautious tone.
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