Major crypto hedge funds expect next year to be a bumper year, as Michael Saylor predicts a demand shock caused by Bitcoin exchange-traded fund (ETF) approvals. Digital asset funds notched a 44% average gain this year, compared to a 52% loss in 2022.

Funds by major players Pantera Capital, Chainview Capital, and Stoka Global LLP gained 80%, 100%, and 268%. Of the 712 funds operating at the start of 2023, including one by Galois Capital, only 462 survived.

Crypto Hedge Fund CEO Expects ‘Token Mania’

Despite their promising performance, the funds failed to keep pace with Bitcoin, up over 150% year-to-date. The market is riding the optimism the US Securities and Exchange Commission will approve an exchange-traded fund tracking the asset directly next year. There are around 13 confirmed bitcoin ETF applications, Bloomberg analyst James Seyffart confirmed last Tuesday.

Read more: Crypto Hedge Funds: What Are They and How Do They Work?

“It’s looking like there’s going to be another token mania coming,” predicts Chainview Capital CEO Dan Slavin.

Some firms struggled to survive this year amid restricted access to banks. Others suffered losses stemming from the collapse of FTX last November.

Galois Capital, whose CEO Kevin Zhou predicted the collapse of the Terra Luna ecosystem, closed its fund because of assets stuck on FTX. Alt Tab Capital, which has 2% of assets stuck on the platform is pursuing the sales of its holdings on the secondary market. Its CEO, Greg Moritz, expects the fund to be up 30% and believes the company is positioned for a bull run. 

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Author: David Thomas

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