Crypto Hedge Funds No Match for Bitcoin

Hedge funds focused on cryptocurrencies delivered double-digit returns in 2024. This is according to data from Galaxy's Visiontrack Composite Index

Crypto hedge funds had a fantastic year in 2024, delivering double-digit returns, according to data from Galaxy’s Visiontrack Composite Index, which measures the performance of 130 crypto-dedicated hedge funds.

The hedge funds achieved returns of up to 40%, but this paled in comparison to bitcoin’s phenomenal 120% return over the same period.

This is despite the fact that many hedge funds go above and beyond to set themselves apart by using proprietary or creative investment strategies, which included bitcoin in many cases.

However, last year, investors seeking crypto exposure also invested in bitcoin exchange-traded funds (ETFs), giving them access to the market without requiring them to adopt more expensive tactics.

“2024 was a challenging year for a lot of crypto funds because it was a bitcoin and memecoins year. Those were the best assets, and everything else trailed behind,” said David Kalk, chief investment officer of Reflexive Capital.

According to Galaxy’s research, the majority of the gains for the crypto hedge funds occurred in the final quarter of 2024, when President Donald Trump became crypto’s biggest cheerleader with bitcoin and other cryptocurrencies surging to new highs as a result of his victory.

The successful introduction of U.S. spot bitcoin ETFs also contributed to the cryptocurrency’s stellar year, with Blackrock’s IBIT ETF breaking industry records as its assets rose to almost $50 billion in just 11 months.

With President Trump being very vocal about his support for the crypto industry, the encouraging returns are boosting confidence among companies and investors seeking to raise new funds.