Crypto hedge funds underperform BTC in 2024 despite strong returns: While 2024 was a strong year for crypto, with BTC surging 120% to exceed USD 100k, crypto-focused hedge funds gained just 40%, struggling to keep up with BTC’s pace, Bloomberg says, citing data from the VisionTrack Composite Index.

The year saw significant volatility, with crypto funds facing 20-30% drawdowns in spring and summer. However, most gains occurred in the final quarter, fueled by improved sentiment and the election of crypto-friendly US president-elect Donald Trump, which propelled BTC to fresh highs.

Crypto hedge funds faced stiff competition from low-fee, BTC-focused ETFs, which offered investors a cost-effective alternative to high-fee fund strategies. BTC and memecoins dominated the market, leaving little room for other digital assets to compete, Reflexive Capital CIO David Kalk noted.

Hedge funds struggled with timing BTC’s performance due to their need to manage risk-sensitive drawdowns. “In the hedge fund world, drawdowns are quite sensitive and so you can’t just always be fully exposed long,” Tread.fi CEO David Jeong said to Bloomberg.

Best performing strategies and leading funds: Directional and quantitative strategies led the way in 2024. The VisionTrack Quant Directional Index rose 53.7%, while Galaxy Digital’s Alpha Liquid Fund gained 76.6%. ProChain Master Fund achieved a 70% return by focusing on large-cap tokens like Bitcoin, outperforming altcoin-centric funds. Fundamental research funds — which rely on research in tokens and blockchains — also performed well in general, as US-based Reflexive Capital posted 106% net returns.

MARKETS THIS MORNING-

Asian markets rallied this morning, driven by Wall Street gains and South Korea’s decision to keep rates unchanged. Hang Seng (Hong Kong) rose 0.9%, while Shanghai Composite and Japan’s Nikkei both saw a 0.3% rise. Meanwhile, Wall Street futures inched slightly higher, after the best S&P performance since November.

TASI

12,212

+0.3% (YTD: +1.5%)

MSCI Tadawul 30

1,527

+0.6% (YTD: +1.2%)

NomuC

31,300

-0.1% (YTD: -0.6%)

USD : SAR (SAMA)

USD 3.75 Sell

USD 3.75 Buy

Interest rates

5.0% repo

4.5% reverse repo

EGX30

29,390

+1.5% (YTD: -1.2%)

ADX

9513

+0.2% (YTD: +1.0%)

DFM

5251

+0.1% (YTD: +1.8%)

S&P 500

5950

+1.8% (YTD: +1.2%)

FTSE 100

8301

+1.2% (YTD: +1.6%)

Euro Stoxx 50

5032

+1.0% (YTD: +2.8%)

Brent crude

USD 82.03

+2.6%

Natural gas (Nymex)

USD 4.11

+0.5%

Gold

USD 2720.80

+1.4%

BTC

USD 99,659.60

+3.3% (YTD: +6.6%)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.3% yesterday on turnover of SAR 7.2 bn. The index is up 1.5% YTD.

In the green: Nice One (+9.9%), Marafiq (+5.8%) and Budget Saudi (+4.9%).

In the red: Astra Industrial (-5.5%), Saudi Re (-3.5%) and Riyadh Cables (-3.1%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.1% yesterday on turnover of SAR 50 mn. The index is down 0.6% YTD.

In the green: Lana (+15.3%), Rawasi (+11.9%) and Alhasoob (+9.7%).

In the red: Alrazi (-6.2%), Quara (-5.8%) and Multi Business (-5.7%).

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