Recently, Bitcoin prices broke through the $100,000 mark, sparking a new wave of excitement, and some hedge funds focused on cryptocurrencies have made substantial profits as a result.
According to data from Hedge Fund Research, funds adopting crypto strategies averaged a 46% increase in November, with a year-to-date return of 76%.
This wave of increases is partly attributed to Trump's victory in the U.S. election, as the market generally expects that the Trump administration's friendly stance towards cryptocurrencies will starkly contrast with the relatively conservative attitude of the Biden administration. Damien Miller, managing partner of MP Alpha Capital, stated:
"Trump's election is good news for digital assets because it will make regulation clearer and create a more friendly and cooperative environment for Bitcoin and blockchain."
Bitcoin breaks through the $100,000 mark, cryptocurrency funds reap a bountiful harvest.
So far this year, the price of Bitcoin has risen 130% to about $100,000, pushing the total market capitalization of major cryptocurrencies from $1.8 trillion to $3.5 trillion. As of the time of writing, Bitcoin has dropped to $95,196 each.
Image source: Wall Street Insights
Investors generally believe that the Trump administration's attitude towards cryptocurrencies will be friendlier than the Biden administration. According to data from Hedge Fund Research, funds adopting crypto strategies averaged a 46% increase in November, with a year-to-date return of 76%.
This performance far exceeds the industry average, during the same period, hedge funds averaged only a 10% return. Brevan Howard Asset Management and billionaire Mike Novogratz's cryptocurrency investment management company Galaxy Digital are the biggest winners in this wave of digital asset surge.
According to the UK Financial Times citing informed sources, Brevan Howard's main crypto fund rose 33% in November, with a cumulative increase of 51% in the first 11 months of this year. As one of the largest hedge fund management companies, Brevan Howard launched a dedicated crypto business in 2021, managing assets up to $35 billion.
Galaxy's hedge fund strategy rose 43% in November, with a cumulative increase of 90% in 2024. This New York-based company has more than doubled its managed assets to $4.8 billion over the past two years by acquiring assets from bankrupt crypto companies.
Analysts believe that despite a pullback in the cryptocurrency market this week due to the Federal Reserve hinting that interest rate cuts next year will be lower than expected, this does not overshadow its overall strong performance.
Is the regulatory environment undergoing a shift? Institutional investors are entering the market en masse.
In 2022, the industry fell into a deep crisis due to the collapse of SBF's FTX exchange, with Bitcoin prices dropping to around $15,500. However, in January 2024, the U.S. Securities and Exchange Commission approved 11 exchange-traded Bitcoin funds, opening the door for institutional and retail investors to enter the cryptocurrency market.
Last week, BlackRock, the world's largest asset management company, also stated that they believe "there is ample reason to include Bitcoin in a multi-asset portfolio."
In addition, some macroeconomic hedge funds have also increased their investments in digital assets. MP Alpha Capital's $20 million global macro hedge fund has risen over 30% this year. The company's partner Miller stated that their investment strategy revolves around the institutional adoption of digital assets, as well as the macroeconomic backdrop of loose monetary policy, a weak dollar, and abundant liquidity.
"We are performing well in digital assets: Bitcoin, Ethereum, and Bitcoin miners."
Nevertheless, several managers warned that the surge in Bitcoin should prompt investors to take stock. Huang of NextGen Digitalventure stated that while he is optimistic about Bitcoin and cryptocurrencies in the long run, "no asset goes up in a straight line."
[Disclaimer] The market carries risks; investment should be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views, or conclusions contained herein are suitable for their specific circumstances. Invest at your own risk.
This article is republished with permission from: (Foresight News)
Original author: Wall Street Insights
"Crypto funds make a killing with 76%! Trump's election brings institutional investors in droves, triggering a wave of digital assets." This article was first published in 'Crypto City'.
