In the first half of the year, the return of Hodl's Bitcoin strategy exceeded 68.8%
According to the latest data, Bitcoin (BTC) delivered an impressive 68.8% excess return in the first half of this year, surpassing the performance of most cryptocurrency funds. This indicates that a Hodl Bitcoin strategy alone can outperform various investment approaches.
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The data was provided by 21e6 Capital AG, a Swiss investment advisory firm specializing in crypto assets. The report states that during the first half of this year, the average return rate of cryptocurrency funds was 15.2%, while Bitcoin experienced a gain of approximately 84%. This suggests that the traditional buy-and-hold strategy remains effective in the current market environment.
Maximilian Bruckner, the Head of Marketing at 21e6 Capital AG, mentioned that cryptocurrency funds have historically performed well in bull markets but showed relatively lackluster performance in the first half of this year. This is primarily attributed to the challenging market conditions and the significant cash reserves held by these funds at the end of 2022.
The victory of Hodl Bitcoin strategy is mainly due to fund decisions to reduce risk. After the collapse of crypto projects like FTX last year, many cryptocurrency funds decided to reduce risk and build up cash buffers. However, this move caused them to miss out on the significant price increase of Bitcoin in the first half of 2023. The report indicates that funds holding substantial cash tend to underperform in bull markets unless the assets they hold perform better than Bitcoin.
The report further points out that the impact of events in 2022 led many funds to hold higher cash allocations in the first half of this year, and most major alternative coins underperformed Bitcoin during this period, presenting greater challenges for these funds.
Despite Bitcoin's significant gains in the first half of 2023, its price still faces some pressure. At the time of writing, Bitcoin's price is around $29,000, struggling to sustain levels above $30,000, which it briefly surpassed during a few periods this year.
The report suggests that it will be crucial to monitor major futures market providers, funding rates, and the ability of quantitative funds to capture trends while observing the market throughout 2023. Additionally, it notes that investor sentiment slightly improved in the first half of 2023, which may lead some funds to consider increasing their cash allocations to the cryptocurrency industry.
However, the report also warns that a full recovery in sentiment has not yet occurred, and the current inflow and outflow data still exhibit some uncertainty.