The Funding: Crypto liquid funds respond to the bitcoin crash
Crypto fund managers were caught off guard by the speed of the recent Bitcoin crash, leading to diverging performance based on strategy.Summary
The recent sharp Bitcoin crash, characterized by rapid capitulation and liquidations, surprised many crypto fund managers who noted the speed of the market unraveling rather than a single trigger. Experts suggest this volatility is part of a broader 'rolling bear market' in altcoins since December 2024, exacerbated by contagion from traditional finance (TradFi) stress. Performance among liquid funds is diverging sharply: directional strategies struggled, while market-neutral and fundamental, thesis-driven managers focusing on revenue-generating tokens have fared better, with some even posting positive returns. Managers agree that broad altcoin season is unlikely, emphasizing a shift toward idiosyncratic alpha derived from deep research, rigorous portfolio construction, and avoiding over-leveraged altcoin bets. Some investors also noted that crypto is losing its shine as a primary destination for new capital compared to sectors like AI, suggesting consolidation and strategy shifts are imminent.
(Source：The Block)