A new report has shown that investors holding Bitcoin actually outperformed most cryptocurrency funds in the first half of 2023. This is because Bitcoin increased in value by more than 80% between January and June.
On the other hand, crypto funds only returned around 15.2% gains on average. While it was still a positive return, it fell far short of what regular Bitcoin investors were making just by buying and sitting still.
21st6 Capital’s Crypto Fund Performance in H1 2023
According to a recently released report from Swiss-based investment advisor 21e6 Capital AG, Bitcoin traders outperformed most crypto funds in H1 by 68.8%.
This is not surprising as BTC was one of the best performing crypto assets in the first half of 2023, seeing huge gains from prospects of the SEC approving a Spot Bitcoin ETF. Bitcoin price started the year around $15,500 and climbed to over $31,400 in July.
Crypto funds generated an average of 15.2% returns in the first half of 2023 lol pic.twitter.com/vb8pwYfiX9
— Alex Kruger (@krugermacro) August 5, 2023
Bitcoin outperforming crypto funds is relatively new, as crypto hedge funds have often significantly outperformed the BTC benchmark in the past. But the crypto industry ended 2022 feeling more gloomy as the market witnessed regulatory uncertainties and the collapse of FTX and Terra.
This seems to have led crypto hedge funds to take a safer approach, giving them larger-than-normal cash positions. When crypto is hot, that money will not be valued like BTC unless the fund’s assets significantly outperform Bitcoin.
The report also noted that directional crypto funds generally outperformed non-directional crypto funds. Non-directional funds, such as arbitrage, lending and staking, do not depend on the direction of the market.
BTC price holds at $29,000 | Source: BTCUSD on Tradingview.com
Outlook for the second half of 2023: more profit for Bitcoin?
The latest report from 21e6 Capital shows the overall sentiment of the crypto market. Cryptofunds had a difficult first half of 2023, with many closings early this year. About 13% of crypto hedge funds have closed this year as a few of them have struggled to present a favorable value proposition to potential investors.
The price of Bitcoin appears to be struggling to move above $30,000, but the outlook for Bitcoin in the second half of 2023 still looks positive. If approved, Bitcoin’s price is expected to continue to rise in the coming months as major investment firms begin offering Spot Bitcoin ETFs.
This influx of capital could spark another bull market for all cryptocurrencies, leading to further gains for BTC holders. This new volume could push the price of BTC above $30,000 again.
aAt the time of writing, BTC is trading at USD 29,043.
Featured image from iStock, chart from Tradingview.com