These crypto hedge funds are riding Bitcoin’s historic rally

The cryptocurrency market rally has delivered extraordinary returns for hedge fund giants Brevan Howard and Galaxy Digital.

The duo emerged as prominent performers following Bitcoin’s rise to $108,000.

Cryptocurrency-focused hedge funds gained 46% in November, pushing their year-to-date returns to 76%, according to data from Hedge Fund Research. This outperformance is outpacing the broader hedge fund sector, which is up a more modest 10% in the first 11 months of 2024.

Hedge funds benefit from market momentum

Brevan Howard Asset Management manages $35 billion in assets under the direction of CEO Aron Landy. The fund saw its main cryptocurrency fund rise by 33% in November alone. This contributed to a 51% increase in the first 11 months of 2024.

Under the leadership of billionaire Mike Novogratz, Galaxy Digital achieved even more impressive results. The hedge fund strategy returned 43% in November and 90% in 2024.

The New York-based firm has successfully increased its assets under management to $4.8 billion. This was accomplished in part through strategic acquisitions of assets from distressed crypto companies.

The recent rise gained further momentum following Donald Trump’s US presidential election victory. Investors see this as a potential catalyst for more crypto-friendly regulatory policies.

Trump’s appointment of venture capitalist David Sacks as cryptocurrency czar and the replacement of SEC Chairman Gary Gensler with cryptocurrency advocate Paul Atkins further boosted the market’s confidence.

Still, it was under Gensler’s stewardship that the crypto industry gained major momentum in January 2024, when the SEC approved 11 exchange-traded Bitcoin (BTC) funds. This move opened new channels for corporate and retail investment. However, the market suffered a slight decline this week after the Fed announced lower-than-expected interest rate cuts for next year.

Bitcoin’s price has increased by 130% since the beginning of the year, reaching nearly $108,000. However, the recent pullback saw BTC fall as low as $92,175. At last check on Saturday, Bitcoin was trading at $97,232.

Source: CoinGecko