It is plain to see that a simple buy-and-hold investment into Bitcoin would have outperformed all of these fund baskets, said 21e6 Capital due diligence manager Jan Spörer and sales and marketing head Maximilian Bruckner. According to Swiss-based crypto investment adviser 21e6 Capital, investors would have benefited more from buying and holding Bitcoin (BTC) than from investing in crypto hedge funds during the first half of 2023. Data provided to Bloomberg showed that crypto funds returned an average of 15% during the period versus an 83% gain for Bitcoin.
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. This led to the closure of about 97, or 13%, of the 123 crypto hedge funds tracked by 21e6 Capital across 70 firms. The underperformance was due to the funds going into the year with larger-than-typical cash positions to help mitigate risks after the collapse of FTX, as well as the underperformance of altcoins.