Bitcoin blasting past $100,000 has turned the crypto market into a goldmine, with hedge funds raking in record profits. Donald Trump’s election win has electrified cryptos, fueling a rally that made November a month to remember for crypto-focused funds.
Reportedly, data from Hedge Fund Research shows these funds posted an incredible 46% gain last month, pushing their 2024 returns to 76%. Compare that to the broader hedge fund industry’s meager 10% year-to-date return, and the numbers speak for themselves.
Galaxy Digital and Brevan Howard cash in big
Galaxy Digital, run by billionaire Mike Novogratz, saw its hedge fund strategy rocket 43% in November, bringing total gains for 2024 to an eye-watering 90%.
Over the past two years, Galaxy has doubled its assets under management to $4.8 billion, thanks to strategic acquisitions of assets from bankrupt crypto firms.
Not to be outdone, Brevan Howard’s main crypto fund posted a 33% gain last month, with year-to-date returns now at 51%. Brevan Howard, managing $35 billion in assets, has been expanding its crypto division since its launch in 2021.
Bitcoin’s rise marks a sharp turnaround from the depths of 2022, when the collapse of Sam Bankman-Fried’s FTX exchange dragged the coin down to $15,500.
At the time, Galaxy reported a $1 billion net loss. Fast forward to 2024, and things couldn’t be more different. The Trump administration is far more crypto-friendly than Joe Biden’s, which is now known for its regulatory clampdowns.
Institutional players enter the game
January 2024 was a turning point moment for the crypto industry. The U.S. Securities and Exchange Commission (SEC) approved 11 bitcoin exchange-traded funds (ETFs), opening the floodgates for institutional and retail investors alike.
BlackRock, the world’s largest asset manager, has since endorsed bitcoin as a viable asset for multi-asset portfolios, further legitimizing its place in traditional finance.
Funds like NextGen Digital Venture have capitalized on this shift. The $120 million crypto equity fund is up 330% since its March 2023 launch, thanks to strategic positions in bitcoin ETFs and shares of companies like Coinbase and MicroStrategy.
Coinbase shares have climbed nearly 60% this year, while MicroStrategy’s stock has skyrocketed over 400%. These gains underscore how traditional equities linked to the crypto space are also riding the wave of renewed interest.
Macro hedge funds are jumping on the bandwagon, too. MP Alpha Capital’s $20 million global macro hedge fund, for instance, is up over 30% this year, boosted by bets on Bitcoin, Ethereum, and also crypto miners.
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