Bitcoin (BTC) holders experienced a highly profitable period as their investment surged by an impressive 84% During the first half of 2023, outshining the average return of 15.2% achieved by most crypto funds during the same period, according to 21e6 Capital AG, a Swiss investment advisory firm.
In an Aug. 2 report, Maximilian Bruckner, the marketing head at 21e6 Capital AG, stated that during previous bull cycles, cryptocurrency funds typically outperformed Bitcoin. However, this year they fell behind due to conservative strategies and unfavorable market conditions.
Bruckner explained that numerous cryptocurrency funds had significant cash holdings by the end of 2022, as they witnessed the downfall of FTX and other crypto projects. This circumstance caused them to miss out on leveraging the Bitcoin rally in H1 2023. Bruckner further added:
Funds with large cash positions will underperform Bitcoin in a bull market, unless the funds’ assets perform significantly better than Bitcoin.
He also observed that the majority of altcoins struggled to match the growth of Bitcoin, which posed challenges for investment funds aiming to expand their portfolios and generate higher returns.
Bitcoin Futures And Investor Sentiment
BTC is currently trading around $29,000, facing challenges in surpassing the $30,000 resistance level that has been tested multiple times this year. Despite this, it still reflects a notable 75% increase in value from the start of the year, as per CoinGecko data. Bruckner added that:
All crypto fund strategies achieved positive results this year. But relative to Bitcoin, they underperformed, especially those with significant exposure to altcoins, to futures, or those strongly dependent on momentum signals.
Bruckner emphasized the firm’s diligent monitoring of the crypto futures market, including funding rates and quantitative funds’ ability to capture trends. These factors hold significant potential for impacting the prices of Bitcoin and other cryptocurrencies.
The report also revealed that investor sentiment has experienced a slight improvement in the first half of 2023. This suggests that certain funds may soon increase their involvement in the crypto sector. However, it also cautioned that the current data on inflows and outflows does not yet reflect a complete recovery of sentiment.