According to data from Swiss investment consultant 21e6 Capital AG, there have been more than 700 cryptocurrency funds worldwide this year, but since the beginning of 2023, 97 funds (13%) have closed crypto funds.
Moreover, the average return for these crypto funds in the first half of the year was 15.2%, lagging behind Bitcoin’s 83.3% gain.
Many funds are holding more cash than usual due to last year’s turmoil in the industry, the report said.
Funds with a market-neutral strategy were the worst performers, with an average return of just 6.8 percent over the January-June period, said Maximilian Bruckner, head of marketing and sales at 21e6.
Funds that made directional bets returned an average of 21.9 percent. But the performance still lags behind Bitcoin.
While many funds have had to slow operations due to regulatory uncertainty over popular banking partners and fund governing bodies.
But discretionary crypto funds do not face this problem, while quant funds are more vulnerable to volatile markets.