The crypto market is showing strong signs of revival, with hedge funds that weathered the 2022 crash now reporting impressive rebounds. After a devastating year marked by exchange collapses and liquidity crises, many crypto hedge funds are not only surviving—they're thriving. With optimism building around regulatory clarity, macroeconomic stabilization, and the long-anticipated Bitcoin halving, industry experts believe 2024 could be the year of the "token frenzy."
👉 Discover how top-performing crypto strategies are positioning for explosive growth in 2024.
The Resurgence of Crypto Hedge Funds
Historically, after Bitcoin leads a market rally, altcoins tend to outperform during the second phase of the bull cycle. This pattern appears to be repeating in 2023–2024, and hedge funds focused on early-stage digital assets are capitalizing on the momentum.
Pantera Capital, one of the oldest and largest crypto hedge funds, has seen its liquid token fund surge nearly 80% year-to-date as of mid-December—remarkable given its 80% loss in 2022. Chainview Capital, managed by 31-year-old Dan Slavin, turned around last year’s 18% decline with a doubled performance this year. Even more striking, Stoka Global LP—a fund specializing in altcoins—reported a 268% return by November 30, according to founder Naveen Choudary.
While these figures don’t match Bitcoin’s own surge of over 150% in 2023, they signal a powerful recovery for an industry still healing from the FTX collapse and broader ecosystem turmoil. The survival and resurgence of these funds reflect renewed investor confidence, particularly as expectations grow for the approval of spot Bitcoin ETFs in the United States.
From Collapse to Comeback: A Shifting Market Landscape
The road to recovery hasn’t been easy. In the aftermath of 2022’s “crypto winter,” an estimated one-third of crypto hedge funds shut down due to redemptions, regulatory pressure, and banking access issues. Galaxy Digital’s VisionTrack data reveals that out of 712 tracked crypto hedge fund firms, approximately 250 have closed in the past 18 months.
Notable casualties include Galois Capital, which had bet heavily on the Luna token before its implosion and later lost nearly half its assets in the FTX bankruptcy. Yet, for those that survived, conditions are improving rapidly.
Bailey York from Galaxy Digital notes that while redemptions dominated the first half of 2023, sentiment shifted in the second half as market performance improved. A key catalyst was Grayscale Investments’ legal victory in August, when a U.S. court ruled in favor of converting its Bitcoin trust into a spot ETF—a move expected to unlock massive institutional inflows.
“Survival itself is an achievement,” says York. “Now we’re seeing renewed fundraising, new fund launches, and expanding interest from global financial hubs like Singapore, Hong Kong, Dubai, London, and Switzerland.”
Why 2024 Could Be the Year of the Altcoin Rally
Despite strong gains across the board, most crypto hedge funds have underperformed Bitcoin’s 150%+ surge in 2023. According to external indices tracking 29 different strategies, the average crypto hedge fund returned 44% year-to-date as of December 20, up from a 52% loss in 2022. Even passive crypto index funds outpaced active managers, averaging around 265% returns over the same period (CoinShares data).
However, many fund managers argue that the real opportunity lies ahead—in the altcoin cycle.
Cosmo Jiang, Portfolio Manager at Pantera Capital, explains: “Historically, after Bitcoin sets the stage, altcoins take the lead in the latter half of the bull market. We believe we’re now entering that phase—where token selection truly matters.”
Pantera’s strategy reflects this outlook. While Bitcoin and Ethereum together make up less than 40% of its portfolio, significant allocations go to high-potential projects like dYdX, a decentralized derivatives exchange. The fund’s core thesis? Long-term value will come from protocols that generate real revenue and solve actual problems.
👉 See how leading hedge funds are identifying high-growth tokens before the next market surge.
Macro Drivers Fueling the 2024 Outlook
Fund managers aren’t relying solely on historical patterns. Several macroeconomic and technical catalysts point to a favorable environment for crypto growth in 2024:
- Stabilizing inflation and paused Fed rate hikes: As U.S. monetary policy shifts from tightening to potential easing, risk assets like cryptocurrencies become more attractive.
- Bitcoin halving (expected Q1 2024): The upcoming block reward reduction will cut new supply in half, historically preceding major price rallies.
- Institutional adoption via ETFs: Approval of spot Bitcoin ETFs could funnel billions from traditional finance into digital assets.
Greg Moritz, COO and Co-Founder of Alt Tab Capital, whose fund is up about 30% this year, says: “We were cautious earlier, but now we’re positioned aggressively for the next leg up.” His firm held only 2% of assets on FTX—now being liquidated through secondary markets—and has rebuilt its strategy around macro tailwinds and on-chain fundamentals.
“This year was about recovery,” Moritz adds. “But 2024? That’s when we celebrate.”
FAQs: Your Questions About the 2024 Crypto Surge
Q: Why are hedge funds bullish on altcoins for 2024?
A: Because history shows altcoins tend to outperform after Bitcoin establishes momentum. With institutional interest rising and network fundamentals improving, many believe we’re entering the second phase of the bull market.
Q: What role does the Bitcoin halving play in 2024 predictions?
A: The halving reduces new Bitcoin supply by 50%, creating scarcity. Past halvings have preceded major rallies—typically within 12–18 months—making 2024 a prime candidate for price acceleration.
Q: Are spot Bitcoin ETFs likely to launch in 2024?
A: Yes—after Grayscale’s court win and growing regulatory clarity, multiple asset managers (including BlackRock and Fidelity) are close to approval. Their launch would open crypto to retirement accounts and mainstream investors.
Q: How did FTX’s collapse impact crypto hedge funds?
A: It triggered mass redemptions and closures. Funds with exposure to FTX or Alameda Research suffered severe losses. However, survivors have strengthened risk controls and diversified custody solutions.
Q: Can hedge funds beat passive investing in crypto?
A: So far in 2023, most haven’t—but active management shines during volatile or fragmented markets. In the altcoin-heavy phase expected in 2024, skilled fund managers may outperform broad indexes.
Q: What risks remain for crypto investors in 2024?
A: Regulatory uncertainty, exchange vulnerabilities, and macro shocks (like recession or rate hikes) still pose threats. Diversification and due diligence remain essential.
Looking Ahead: A New Era for Digital Assets
The mood among crypto hedge fund leaders today echoes early 2020—just before DeFi summer and NFT mania transformed the landscape. Dan Slavin of Chainview Capital puts it simply: “It feels like three years ago. Bitcoin is breaking out again. The energy is back.”
With improving fundamentals, stronger infrastructure, and growing institutional interest, 2024 may indeed be remembered as the year of the token boom. While past performance doesn’t guarantee future results, the confluence of technical cycles, macro trends, and innovation suggests a powerful rally could be underway.
For investors and observers alike, one thing is clear: the crypto market isn’t just recovering—it’s repositioning for something bigger.