Hedge funds in the crypto space are reportedly gearing up for what some say could be a positive year for the digital asset markets.
After surviving a deep bear market in 2022, companies like Pantera Capital, led by crypto veteran Dan Morehead, expect altcoins to outperform Bitcoin (BTC) as the market cycle evolves, according to Bloomberg. reports.
Says Cosmo Jiang, portfolio manager at Pantera,
“We may be in the second part of the cycle where token selection really matters…Our LPs turn to us for exposure to the crypto landscape and technology as a whole, not just Bitcoin. Our core statement is: if you believe this industry is going anywhere, there has to be protocols that actually generate revenue.”
Jiang says one of the company’s largest holdings next year will be DYDX, the native token for the Ethereum-based decentralized exchange (DEX). According to the investor, BTC and ETH make up less than 40% of the fund.
Greg Moritz, founder of crypto hedge fund Alt Tab Capital, says the firm remained cautious through most of 2023 but is now preparing to take on more risk next year during the “pending bull run,” which he believes could be triggered by several different macro and sector specific factors.
“Now we’re in a position where we’re super aggressively positioned for the bull run ahead…Overall, we feel like this year has been the recovery. Next year is really about knocking it out of the park and celebrating.
At the time of writing, Bitcoin is up almost 150% on the year, while Ethereum is currently trading at around double its 2023 opening price.
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Featured image: Shutterstock/KeremGogus/Vladimir Sazonov