Crypto Liquid Funds Respond to Bitcoin Crash:💥💥🔥🔥💥
Market Overview, Bitcoin's Sudden Crash: Bitcoin's 20%+ crash shocked several crypto funds, however, the prices have partially rebounded since.
Common Thread: One of the main themes of fund managers was the speed at which the market's unraveling happened, sentiment flipped quite fast and the fear indicators increased significantly.
Fund Performance, Divergence: Performance among crypto hedge funds is diverging sharply, with a focus on strategy design being the key distinguishing factor.
Directional Strategies: Down on average 2%, with some funds down over 11% in 2025.
Market, Neutral Strategies: Small positive returns of 0.5% to 1%.
Quant and DeFi Strategies: These strategies are highly adaptable to the recent volatility and are very likely to perform well this year.
Investment Strategies, Fundamental, Thesis, Driven Managers: Concentrated portfolios in liquid, revenue, generating tokens generally tend to recover quicker during selloffs driven by volatility.
Multi, Strategy Playbooks: Shifting between relative value, volatility arbitrage, and DeFi yield as each opportunity comes.
Selective Investing: Funds are becoming more and more geared towards revenue, generating tokens and clearer value accrual.
Outlook, No Broad Alt Season: Most investment managers describe a shift towards selective, fundamentals, driven investing. Hence, altcoin outperformance is expected to remain subdued.
- Growing Interest: Yield and credit strategies with limited directional exposure are gaining interest.
- Crypto's Shine: Crypto is no longer the obvious first stop for new capital, with investors increasingly looking to other technologies and new areas of opportunity.
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