TL;DR
- Crypto hedge funds achieved an average return of 40% in 2024, according to the VisionTrack Composite Index, highlighting the sector’s resilience.
- Bitcoin outperformed all assets with a spectacular growth of 120%, reaching a historic milestone by surpassing $100,000 for the first time.
- Most of the hedge fund gains occurred in the last quarter of 2024, driven by macroeconomic factors such as political support and the launch of Bitcoin ETFs in the U.S.
In 2024, the crypto market was dominated by Bitcoin, which experienced an extraordinary growth of 120%, posing a tough challenge for crypto hedge funds to outperform. According to the VisionTrack Composite Index, which tracks the performance of 130 crypto hedge funds, the average return stood at 40%. While positive, these results pale in comparison to Bitcoin’s historic performance, which broke the $100,000 mark and solidified its status as the year’s most profitable digital asset.
David Kalk, founder of Reflexive Capital, noted,
“It was a challenging year for many funds because Bitcoin and memecoins dominated the market, leaving other strategies lagging behind. Investors primarily sought high-cap assets.”
Similarly, David Jeong, CEO of Tread.fi, emphasized the difficulty for crypto hedge funds to outperform Bitcoin, explaining that it’s incredibly hard to predict the movements of such a volatile asset in this environment.
Quantitative and Directional Strategies Lead Performance
Despite the challenges, some hedge funds managed to stand out through directional and quantitative strategies. The VisionTrack Quant Directional Index reported a 53% increase, while the VisionTrack Fundamental Index grew 40%, showcasing the effectiveness of diversified and sophisticated approaches.
Among the top performers, Reflexive Capital achieved a net return of 106% due to significant exposure to high-cap assets like Bitcoin. Similarly, the Tephra Digital Asset Fund LP, led by Ryan Price and Raghav Chopra, posted a 100% gross return in 2024, doubling its performance from the previous year, driven by strategies grounded in macroeconomic and fundamental analysis.
The final quarter of the year marked a turning point, with a widespread market surge. The election of Donald Trump as U.S. president, who shifted his stance on cryptocurrencies and publicly supported them, acted as a catalyst. Additionally, the successful launch of Bitcoin ETFs in the U.S. provided greater legitimacy to the asset, attracting the attention of both institutional and retail investors, which accelerated the recovery of the crypto market after several volatile years.
With these developments, Bitcoin reaffirmed its position as the market’s undisputed leader, while crypto hedge funds continue to innovate and adapt to stay competitive in an ever-evolving landscape.
