Crypto Liquid Funds Reassess Risk After Bitcoin’s Sharp Crash
Bitcoin's sharp decline of over 20% last week caught crypto liquid funds off guard, primarily due to rapid sentiment shifts and heavy spot sales rather than a single event. Fund managers noted that the selloff revealed persistent structural weaknesses, with contagion spreading from unwinding crowded trades. Many describe the current state as a "rolling bear market" in altcoins, which have been under pressure since late 2024.
Performance varies significantly among funds, with concentrated portfolios of liquid, revenue-generating assets recovering faster. Multi-strategy funds are generating alpha through relative value trades and volatility arbitrage, while leveraged altcoin funds faced the most significant challenges. Most managers see little chance of a broad altcoin rally soon, instead focusing on sector-specific opportunities driven by fundamentals.
There is growing concern that crypto is losing its edge to AI and tech innovations, though skilled managers continue to find opportunities in consolidation and strategic shifts.
TheNewsCrypto02/09 07:46
