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Crypto Hedge Funds Expect a Bumper 2024 Amid Price Shocks From ETFs and BTC Halving

2 mins
Updated by Ryan James
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In Brief

  • Executives from Chainview Capital and Alt Tab Capital predict that 2024 could be a bumper year after modest growth in 2023.
  • The 462 crypto hedge funds that survived 2023 experienced an average gain of 44%, compared to a more than 50% loss in 2022.
  • MicrSstrategy Executive Chairman Michael Saylor expects ETFs and the halving to create a market shock that will be bullish.
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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. 

MicroStrategy Chair Sees Twin Bullish Events

Michael Saylor, the executive chairman of MicroStrategy and head of its Bitcoin strategy, expects next year to benefit from a demand shock caused by investments in ETFs and a supply shock caused by the Bitcoin halving in April. Both augur well for the asset in 2024.

Read more: Bitcoin Halving Cycles and Investment Strategies: What To Know

MSTR (Blue) and BTC (Orange) Are Up 327% and 159% YTD
MSTR (Blue) and BTC (Orange) Are Up 327% and 159% YTD | Source: WSJ

According to a recent filing with the US Securities and Exchange Commission, MicroStrategy bought 14,620 BTC for $615.7 million between Nov. 20, 2023, and Dec. 26, 2023. The latest purchase has taken the company’s holdings to 189,150 BTC. The company’s stock, which many investors view as a proxy for holding Bitcoin, is up 327% since the start of the year.

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David Thomas
David Thomas graduated from the University of Kwa-Zulu Natal in Durban, South Africa, with an Honors degree in electronic engineering. He worked as an engineer for eight years, developing software for industrial processes at South African automation specialist Autotronix (Pty) Ltd., mining control systems for AngloGold Ashanti, and consumer products at Inhep Digital Security, a domestic security company wholly owned by Swedish conglomerate Assa Abloy. He has experience writing software in C,...