Crypto hedge funds hit a rough patch in 2025

Business Dec 20, 2025

Crypto hedge funds kicked off 2025 with big expectations, but the year didn't go as planned.
After a major October crash, most funds took a hit—directional strategies dropped 2.5% year-to-date through November, and altcoin-focused ones tumbled by 23%.
The only real winners were market-neutral funds, which managed to pull off a solid 14% gain.

What caused the shakeup?

The October crash, triggered by US-China tariff tensions, wiped out nearly $20 billion and exposed weaknesses in crypto infrastructure—especially for altcoins.
With more institutions joining in through ETFs, trading got tougher and old strategies stopped working as well.
Now, some funds are shifting away from risky altcoins and putting more into DeFi to adapt to the new landscape.