Data from Swiss investment adviser 21e6 Capital AG indicates that nearly 100 crypto funds have closed this year. Despite higher returns, these funds have been underperforming compared to bitcoin and have faced challenges with banking partnerships and regulation uncertainties.
Bloomberg News reports that, according to data from 21e6 Capital AG, a total of 97 crypto funds have shut down thus far in 2023. These closures came from over 700 existing crypto funds worldwide. The funds showed an average return of 15.2% in the first half of the year but underperformed compared to bitcoin's gain of 83.3%. One reason for this underperformance might be that the funds held more cash than usual due to industry turmoil last year.
Maximilian Bruckner, head of marketing and sales at 21e6, said that some funds have been struggling to find new partners for banking services. Directional funds performed well but still underperformed compared to bitcoin. While many funds faced challenges due to regulatory uncertainties surrounding popular banking partners and fund administrators, discretionary crypto funds did not face these issues.
Quantitative funds, on the other hand, were stymied by choppy markets. Bruckner observed that although investor confidence has slightly improved, fund inflows and fund launches have yet to signal a full recovery in sentiment.
