Bitcoin HODLers Beat Crypto Funds By 69% In The First Half Of 2023

In the first half of 2023, Bitcoin (BTC) investors found that the most effective strategy was simply to buy and hold, commonly known as “holding,” the cryptocurrency. This straightforward approach yielded a remarkable performance surpassing most crypto funds by an impressive 68.8% within the same period.

According to data provided by 21e6 Capital AG, a Switzerland-based investment adviser, it was found that crypto funds generated an average return of 15.2% in the first half of 2023. In contrast, BTC experienced a significant gain of around 84%.

According to a report on August 2nd, Maximilian Bruckner, the head of marketing at 21e6 Capital AG, stated that previous bull runs typically saw crypto funds outperforming Bitcoin. However, this year, they failed to do so.

Bruckner highlighted market challenges and substantial crypto fund cash reserves at 2022’s end. These factors caused the situation.

Many crypto funds chose to reduce risk and increase their cash reserves after the collapse of FTX and other crypto projects in 2022. Unfortunately, this cautious approach led them to miss out on a significant BTC price rally during the first half of 2023.

“Funds with large cash positions will underperform Bitcoin in a bull market unless the funds’ assets perform significantly better than Bitcoin.”

The report adds:

“Due to the general sentiment left behind by the end of 2022, many funds had larger-than-normal cash positions. Furthermore, most major altcoins also underperformed Bitcoin – a tough environment for funds”

Bitcoin Is Still Up 75% Since January

Bitcoin trades at about $29,000 in the market, struggling to stay above $30,000 due to resistance. Throughout 2023, it briefly surpassed this level on a few occasions.

BTC has seen a remarkable 75% increase since January 1st, even considering its current price. This data is sourced from CoinGecko.

The report observed that all cryptocurrency fund strategies achieved positive results this year. However, they fell short compared to Bitcoin, especially those with exposure to alternative coins, future contracts, or momentum signals.

The report added:

“Going forward, we are closely monitoring which exchanges will establish themselves as leading futures providers. Furthermore, the level of the funding rates in crypto futures markets and the ability of quantitative funds to capture trends will be areas of focus when we observe the markets”

The report suggests that investor sentiment in the first half of 2023 has experienced a slight improvement. This indication implies that certain funds might soon increase their investments in the crypto sector.

However, current data suggests incomplete sentiment restoration despite indications of inflows and outflows.

“The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.”