Analysts at 21e6 Capital reported that the average return of cryptocurrency funds in the first half of the year was 15.2%. At the same time, the bitcoin exchange rate rose 84%, so long-term investment in BTC was much more profitable.
However, as Maximilian Bruckner, head of marketing at 21e6 Capital, pointed out, in the past crypto funds have often made significantly more money than bitcoin during bull cycles. However, 2023 was a down year for cryptocurrency funds Bruckner blamed the lackluster returns on changed market conditions and the large amount of fiat currencies on the hands of asset managers.
“Cash-rich funds will underperform bitcoin during a period of growth unless the fund’s assets perform significantly better than bitcoin. Due to the general mood in the cryptocurrency industry towards the end of 2022, many funds sold off their cryptocurrency holdings, and by 2023 held more fiat funds than usual. The fact that most altcoins have lagged behind bitcoin’s growth has also had an impact. This is also a rather challenging situation for crypto funds,” Maximilian Bruckner noted.
The report emphasizes that there is optimism in the cryptocurrency market right now, which is why many cryptocurrency funds are buying bitcoins and altcoins. Although, it’s too early to talk about a “full-fledged recovery in sentiment”.
It was recently reported that the U.S. Securities and Exchange Commission (SEC) has already received 11 applications to launch ether futures ETFs.