I'm LongbridgeAI, I can summarize articles.The rise of Bitcoin is partly attributed to Trump's victory in the U.S. election, with the market generally expecting a friendly stance towards cryptocurrencies from the Trump administration. According to data from Hedge Fund Research, funds adopting cryptocurrency strategies averaged a 46% increase in November, with a year-to-date return rate of 76%
Recently, the price of Bitcoin has surpassed the $100,000 mark, sparking a new wave of excitement, with some hedge funds focused on cryptocurrencies reaping substantial profits.
According to data from Hedge Fund Research, funds adopting cryptocurrency strategies averaged a 46% increase in November, with a year-to-date return of 76%.
This surge is partly attributed to Trump's victory in the U.S. election, with the market widely expecting that the Trump administration's friendly stance towards cryptocurrencies will sharply contrast with the relatively conservative approach of the Biden administration. Damien Miller, managing partner of MP Alpha Capital, stated:
“Trump's election is good news for digital assets as it will provide clearer regulations and create a more friendly and collaborative environment for Bitcoin and blockchain.”
Bitcoin Breaks $100,000 Mark, Cryptocurrency Funds Reap Rewards
So far this year, the price of Bitcoin has risen by 130% to around $100,000, pushing the total market capitalization of major cryptocurrencies from $1.8 trillion to $3.5 trillion. As of the time of writing, Bitcoin has fallen to $95,196 per coin.
Investors generally believe that the Trump administration's attitude towards cryptocurrencies will be more favorable than that of the Biden administration. According to data from Hedge Fund Research, funds adopting cryptocurrency strategies averaged a 46% increase in November, with a year-to-date return of 76%.
This performance far exceeds the industry average, with the average return for hedge funds during the same period being only 10%. Brevan Howard Asset Management and the cryptocurrency investment management company Galaxy Digital, founded by billionaire Mike Novogratz, are the biggest winners in this wave of digital asset surges.
According to the Financial Times, citing informed sources, Brevan Howard's main cryptocurrency fund rose by 33% in November, with a cumulative increase of 51% over the first 11 months of this year. As one of the largest hedge fund management companies, Brevan Howard launched a dedicated cryptocurrency business in 2021, managing assets totaling up to $35 billion.
Galaxy's hedge fund strategy rose by 43% in November and has increased by 90% year-to-date in 2024. This New York-based company has more than doubled its managed assets to $4.8 billion over the past two years by acquiring assets from bankrupt cryptocurrency companies.
Analysts believe that despite a recent pullback in the cryptocurrency market due to the Federal Reserve indicating that next year's rate cuts may be lower than expected, this does not overshadow its overall strong performance.
Regulatory Environment Shifts? Institutional Investors Enter the Market
In 2022, the industry fell into a deep crisis due to the collapse of Sam Bankman-Fried's FTX exchange, with Bitcoin's price dropping to around $15,500. However, in January 2024, the U.S. Securities and Exchange Commission approved 11 exchange-traded Bitcoin funds, opening the door for institutional and retail investors to enter the cryptocurrency market.
Last week, the world's largest asset management company, BlackRock, also stated that they believe “there is ample reason to include Bitcoin in a multi-asset portfolio.”
In addition, some macro hedge funds have also increased their investments in digital assets. MP Alpha Capital's $20 million global macro hedge fund has risen by more than 30% this year. The company's partner, Miller, stated that their investment strategy revolves around the institutional adoption of digital assets, as well as a macro backdrop of loose monetary policy, a weak dollar, and ample liquidity.
“We have performed well in digital assets: Bitcoin, Ethereum, and Bitcoin miners.”
Nevertheless, several managers warned that the surge in Bitcoin should prompt investors to pause and take stock. Huang from NextGen Digitalventure stated that while he is optimistic about Bitcoin and cryptocurrencies in the long term, “no asset will rise in a straight line.”