According to data from Switzerland-based investment adviser 21e6 Capital AG, around 13% of crypto hedge funds have shut down so far this year. The reasons for the closures were weak performance and difficulties in accessing banking services.

Furthermore, crypto funds generated, on average, around 15% returns in the first half of 2023. They have been underperforming Bitcoin, which gained 77% over the same period.

Crypto hedge funds suffer from lagging performance to Bitcoin and a set of operational difficulties, such as accessing banking services.

About 13% of them shut down this year, according to data tracked by 21e6 Capital. 1/https://t.co/L7ozmXW1G4 @crypto

— Yueqi Yang (@Yueqi_Yang) August 4, 2023

Crypto Hedge Funds Lagging

Despite reports to the contrary claiming that the majority of banks are crypto-friendly, the reality is very different for many crypto hedge funds.

21e6 reported that many funds held larger-than-normal cash positions following industry turmoil in 2022. As a result, they missed out on Bitcoin’s big moves earlier that year.

Head of marketing and sales at 21e6, Maximilian Bruckner, said many funds are “still struggling to find new partners” for banking services. Banking problems were compounded by the collapses of crypto-friendly banks Silvergate Capital and Signature Bank earlier this year.

Regulatory pressure and America’s SEC-led war on crypto haven’t helped their causes.

97 of the 700 crypto hedge funds tracked by the firm have closed in 2023, it stated. Several closed following the fallout of the FTX collapse, where many had stored their funds.

Those with “market-neutral strateg