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Since the launch of the first bitcoin fund in 2013, the number of cryptocurrency funds has surged to over 840, reflecting sustained growth. Despite a setback in 2022, marked by a 66% decline in total assets to $20 billion and a 95% drop in inflows compared to 2021, there are promising signs of recovery. Recent developments show major crypto funds rallying by up to 50%, indicating a potential resurgence.
What are Cryptocurrency Funds All About?
Cryptocurrency funds, a modern investment alternative akin to traditional mutual funds and ETFs, feature portfolios comprised of digital tokens and cryptocurrencies instead of conventional assets like stocks or commodities.
In this guide, we spotlight the standout crypto funds for 2024, catering to investors of all sizes.
Since the inception of the first bitcoin fund in 2013, the cryptocurrency fund landscape has burgeoned, with over 800 funds established, signaling exponential growth in this emerging market segment.
Despite a tumultuous 2022, marked by a 66% drop in total assets to $20 billion and a 95% decrease in inflows compared to 2021, 2023 witnessed a remarkable recovery. Major crypto funds rebounded by up to 50%, propelling the total AUM to $58.9 billion. This resurgence was fueled by regulatory clarity and the escalating demand for digital assets as a hedge against global economic instability.
Our Evaluation Methodology: This review considers key performance indicators such as Assets Under Management (AUM), workforce size, and tenure.
Exploring Cryptocurrency Funds: Unveiling the Top Picks for 2024:
Greyscale
Established in 2013, Grayscale swiftly ascended to become the world’s premier digital currency asset manager. It has an AUM of $23.3 billion. In 2021, the firm achieved a remarkable 73.4% coverage of the digital currency market, offering a diverse range of investment products, from single-asset trusts to diversified crypto DeFi funds.
Despite a 2022 downturn that resulted in a 50% decline, Grayscale retains its position as the leading crypto asset manager in 2023, boasting a total AUM exceeding $20 billion. At its zenith, Grayscale commanded a total AUM of $43.5 billion.
For those seeking a genuinely crypto-focused investment firm, Grayscale stands as the unrivaled choice. With a robust AUM exceeding $20 billion, it reigns as the largest and most esteemed digital asset investment firm on a global scale.
Pantera Bitcoin Funds
As the inaugural US-based institutional asset manager exclusively devoted to blockchain, Pantera Capital has been at the forefront of crypto funds since 2013. With the launch of four crypto-focused funds and spearheading over 100 out of 210 investments, Pantera has proven its leadership, having around $3.8 billion as AUM.
From an initial $57 million investment in 28 companies, Pantera has realized an impressive $242 million in ROI.
For those valuing longevity, Pantera Capital’s Bitcoin Fund stands out. As one of the pioneering companies in the crypto-based fund arena, they offer an extensive track record and profound expertise in the field.
a16z Crypto
a16z stands as the crypto vanguard for Andreessen Horowitz, making significant strides since its founding in 2009 and the launch of its dedicated crypto fund in 2018. Defying the crypto bear market, the fund secured an impressive $4.5 billion in 2022.
With four distinct funds targeting digital assets, Web3, and blockchain startups, a16z is a prominent force in the crypto investment landscape. Recognized for their insightful market analysis and forward-looking perspectives, Andreessen Horowitz has become a trusted name in the crypto space.
Despite taking measured steps into fund establishment, a16z Crypto swiftly rose to claim the second-largest assets under management, making it a compelling choice for those who believe ‘bigger is better’ in the crypto fund arena.
Coinshare
Established in 2014, CoinShares holds the distinction of being Europe’s inaugural and largest bitcoin investment fund. Offering diverse exposure to digital assets, their portfolio includes a range of crypto ETFs, ETPs, and multi-asset portfolios.
In a notable milestone, CoinShares International went public in 2021 and was listed on Sweden’s Nasdaq First North Growth Market. By Q2 2023, the firm proudly reported a robust profit of $6.4 million, a significant turnaround from the $727k loss in the same period the previous year.
For Europeans seeking a solid entry into the crypto space with a proven track record, CoinShares emerges as a compelling choice, combining a lengthy history with a demonstrated ability to generate profits.
Galaxy Digital Capital Management
Based in New York, Galaxy Digital is a forward-looking investment firm with a focus on digital assets and blockchain technology, blending the hedge fund and venture capital models. Founded by Michael Novogratz, the firm experienced a remarkable 600% growth in AUM during the 2021 crypto bull run.
As of 2023, Galaxy Digital has backed over 229 companies across the crypto spectrum, engaging in activities ranging from trading and mining to investment banking, asset management, and venture capital funding.
With a broad and diverse investment portfolio spanning the entire crypto ecosystem, Galaxy Digital Capital Management stands out as a top choice for those seeking comprehensive diversity in their crypto investments.
Polychain Capital
Polychain Capital, spearheaded by Olaf Carlson-Wee, Coinbase’s inaugural employee, uniquely pursues exceptional returns through dynamic management strategies, solely focusing on digital currencies rather than companies.
Since its inception, the fund has executed over 168 strategic investments, notable among them being Ava Labs, Coin DCX, and Dfinity. In 2023, Polychain Capital took the lead in SPACE ID’s strategic funding round ($10 million) and Cubist Inc.’s seed round ($7 million).
For those seeking a crypto fund exclusively dedicated to cryptocurrencies, Polychain Capital stands out as a clear choice. Its resilience through market fluctuations underscores its enduring strength in both bullish and bearish conditions.
Lessons for Investors
In conclusion, these funds play a pivotal role in shaping the crypto landscape, influencing investors’ perspectives on portfolio diversification. Analogous to traditional investment vehicles, crypto funds emerge as compelling options for investors navigating the dynamic crypto market.
Their approval could catalyze transformative changes in the crypto fund arena, fostering heightened liquidity, bolstering regulatory frameworks, and facilitating seamless entry for traditional investors into the ever-evolving crypto markets.
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