Crypto Hedge Funds Underperform as Bitcoin Surges Over 500% Since 2017 – Coincu

Recent analysis by 10x Research has revealed that crypto hedge funds have underperformed since 2017, showing an average return of just 272%. In contrast, Bitcoin has experienced a phenomenal increase of over 565% during the same period.

This performance gap remains a critical concern in the crypto fund management space, indicating a need for strategic shifts to align with market trends and investor expectations.

High Correlation Hindering Hedge Fund Diversification

Many crypto hedge funds continue to stick with outdated strategies, which have become less effective amid current market volatility. Trend trading strategies alongside a more tactical approach might yield better results, according to industry analysts. Most hedge funds have struggled with an 89% correlation in their monthly returns, making it hard to diversify effectively. Concerns about the stability of altcoin investments continue amid this backdrop, as previous high-gain strategies have failed to spark significant market exuberance.

The shift towards Bitcoin ETFs highlights a significant market transition as individual investors adjust their portfolios in response to hedge funds’ underperformance. This movement could prompt further industry-wide strategic changes, as hedge fund managers assess their methodologies in hopes of improving returns.

“The dominance of institutional inflows to ETFs is likely to support BTC and ETH performance, indicating sustained institutional interest in the crypto market.” — Standard Chartered Research Team

Market Data and Insights

Did you know? The high correlation among hedge funds limits their risk diversification and tends to mirror broader market trends rather than providing active management benefits.

Bitcoin, the leading cryptocurrency by market cap, is priced at approximately $109,932.41 with a market dominance of 63.30%. Recent data shows a market cap of $2.18 trillion alongside a 24-hour trading volume of 46.96 billion, according to CoinMarketCap (data last updated on May 26, 2025). Over the past 30 days, Bitcoin has risen by 16.43%, demonstrating robust growth.

Research insights suggest that the continuation of these trends is likely contingent upon broader financial policies and technological advancements. The transition towards regulations could solidify the prominence of Bitcoin ETFs, while ongoing tech innovations may drive further differentiation between crypto investment vehicles.