Colossus with feet of clay. Replicas of thecollapse of the Sam Bankman-Fried platform continue to be felt and impacting the cryptocurrency sector. Users, regulators, investors, everyone still has in mind this major disaster of 2022 which continues to infuse minds more than 9 months later. This is one of the conclusions of a report proposed by a Swiss crypto investment specialist, which offers some explanations as to the poor results of investment funds The start of the new year has seen a number of investment funds in the sector. Let’s take a closer look at the difficulties faced by these key players in the ecosystem, who have struggled to recover from last year’s turmoil.
Rough winter for crypto investment funds
21e6 is a Swiss-based crypto investment advisor that connects investors with various specialized funds in the sector. A few days ago, its teams published a report entitled Crypto fund performance in 2023: a six-month review and analysis by 21e6 Capital. The main takeaway from this study is that poor start to the year of the investment sector as a whole since 97 funds have simply closed over this period. Of course, there were more 700 players of the same type, but this still represents a significant share of the market.
In addition, Swiss experts note that the results of some so-called directional funds are on the whole disappointing, since they only reported « that « 15,2% on average, while over the same period Bitcoin printed 83,3% increase. For want of an explanation, 21e6 points to theinstability following the fall of FTXan excess of liquidity from managers, but not only. Details to follow.
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This Swiss crypto investment specialist offers a few explanations
The first explanations are to be found on the side of the former number 2 platform in the world, and they are multiple. Firstly, FTX was one of the world’s leading partners of these investment funds with regard to forward contracts and options. Its sudden disappearance led to an investment freeze and the search for new options. new partners. This obviously had an impact on performance. In addition, theuncertainty economic and decline violent price declines have prompted managers to be less exposed to crypto by having more cash. But when the price of Bitcoin took off again, the funds weren’t on the train.
By the way, this volatility in crypto has another surprising consequence, that of confusing trading algorithms ! The latter are still struggling to follow contrary trends on the crypto market and exploit the sometimes erratic price movements. This is particularly true of quantitative funds. Finally, the umpteenth backlash to this interminable crypto winter is uncertainty. regulatory that hangs over many countries which makes us cautious. Moreover, funds are also looking for banking partners likely to follow them onto the supposedly slippery terrain of crypto, and because of this deleterious regulatory environment, there aren’t many of them.
By way of conclusion, the report notes a few positive signals: « investor confidence has improved slightly, but cash inflows and fund creations still show considerable market timidity ». These are the words of Maximilian Bruckner, head of marketing and sales at 21e6, and they resonate with those of another crypto investment specialist who has also, seriously scaled back.
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