In the first half of 2023, Bitcoin hodlers employing the classic buy and hold strategy surpassed most crypto funds by a substantial margin of 68.8%. The report by 21e6 Capital AG, a Switzerland-based investment adviser, revealed that despite crypto funds’ historical ability to outperform Bitcoin during bull runs, they underperformed this year due to cautiousness and excessive cash holdings.

Crypto Funds’ Struggle in 2023 and Causes of Underwhelming Performance

According to 21e6 Capital AG’s data, crypto funds achieved an average return of 15.2% in H1 2023, while Bitcoin recorded impressive gains of approximately 84%. Maximilian Bruckner, the head of marketing at 21e6 Capital AG, noted that crypto funds had previously displayed the ability to outperform Bitcoin during bullish market conditions.

A screenshot of H1 performance from the report

Bruckner attributed the underwhelming performance of crypto funds in 2023 to the challenging market conditions and the significant cash reserves they accumulated in late 2022. Following the downfall of projects like FTX, many funds decided to play it safe and establish cash buffers, missing out on the significant BTC price rally in H1 2023.

Impact of Cash Positions

The report emphasized that funds with large cash positions tend to underperform Bitcoin in a bull market unless their assets perform exceptionally better than Bitcoin. Due to the cautious sentiment prevailing at the end of 2022, numerous funds held larger-than-normal cash positions. Additionally, most major altcoins performed poorly compared to Bitcoin, further challenging the funds.

The report acknowledged that all crypto fund strategies achieved positive results in 2023. However, compared to Bitcoin, they underperformed, especially those with substantial exposure to altcoins, futures, or heavily reliant on momentum signals. Moving forward, the report suggests close monitoring of leading futures providers and funding rates in crypto futures markets, as well as the ability of quantitative funds to capture trends.

Market Conditions, Investor Sentiment and Future Outlook


At present, BTC is trading at around $29,000 and struggling to maintain levels above $30,000, which it briefly surpassed a few times in 2023. Despite this, BTC has gained a significant 75% in price since the start of the year, as indicated by CoinGecko data.

The report indicated a slight improvement in investor sentiment over H1 2023, implying that some funds may start investing more cash in the crypto sector. However, it also highlighted that data on inflows and outflows suggest a “full recovery of sentiment” has not yet occurred.

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