– Crypto funds underperformed Bitcoin in the first half of 2023, with average returns of 15.2% compared to Bitcoin’s gains of around 84%.
– The underwhelming performance of crypto funds was attributed to challenging market conditions and the large amount of cash they held in late 2022.
– Many crypto funds opted to play it safe and develop cash buffers after the implosion of FTX and other crypto projects in 2022, missing out on a significant BTC price rally in H1 of 2023.
– Funds with large cash positions will underperform Bitcoin in a bull market unless their assets perform significantly better than Bitcoin.
– The report highlighted that investor sentiment has slightly improved, suggesting that some funds may start investing more cash into the crypto sector. However, a full recovery of sentiment has not yet taken place.