Key Takeaways
- • Bitcoin has traded above $60,000 since late February 2024, with institutional capital, rather than retail traders, driving the rally following January's approval of Bitcoin ETFs, according to Fortune's Leo Schwartz.
- • Crypto hedge funds have rebounded after a brutal 2022: Stoka Capital, founded by a Goldman Sachs alumnus and focused mainly on altcoins, gained 268% by the end of November 2023, per Bloomberg.
- • Lekker Capital, founded by Quinn Thompson (formerly of Maple Finance and Guggenheim Partners), is targeting a $20 million raise and plans to begin trading in May 2024.
- • Lekker will split assets roughly 50/50 between digital native tokens and public equities such as Bitcoin miners, MicroStrategy and Coinbase, arguing that venture-dominated crypto markets lack natural liquid-market buyers.
- • Thompson cites an expected Federal Reserve rate-cut cycle and the U.S. elections in November 2024 as potential catalysts, while acknowledging regulatory uncertainty.
Summary
Bitcoin has traded north of $60,000 since late February 2024, and memecoin speculation has reached levels not seen since early 2022. Fortune's Leo Schwartz reports that investors remain hesitant to describe the market as a bull market, citing the collapses of the past two years and the still-limited public awareness of the resurgence. Retail participation appears limited, with the rally instead driven by institutional capital following the January 2024 approval of spot Bitcoin ETFs and the entry of traditional asset managers into the space.
According to Bloomberg's December 2023 reporting, crypto hedge funds began positioning for this shift before the ETFs launched. The sector had been hit hard in 2022, when flagship funds such as Pantera Capital fell by 80%. Performance improved as Bitcoin recovered; Stoka Capital, founded by a Goldman Sachs alumnus and investing mostly in altcoins, gained 268% by the end of November 2023.
New crypto hedge funds that invest across public and private markets, from liquid tokens to company equity, have also emerged. Schwartz previously reported on Split Capital, launched in January 2024 by alumni of LedgerPrime, a trading firm later acquired by FTX. Additional LedgerPrime alumni launched another fund in February, which Schwartz notes points to growing interest from limited partners.
The latest entrant is Lekker Capital, founded by Quinn Thompson, who previously worked at digital asset lender Maple Finance and at Guggenheim Partners. Thompson told Fortune he is targeting a $20 million raise and expects to begin trading in May 2024. Unlike many crypto funds concentrated in liquid tokens, Lekker will hold digital native tokens and public equities, including Bitcoin miners, MicroStrategy and Coinbase, in roughly equal proportions. Thompson argues the market has been dominated by venture-style investment in private companies and was over-allocated in the previous cycle, and that venture liquidity events depend on IPOs or token launches without enough allocator capital to provide liquid-market demand.
Thompson views the macro backdrop as supportive, pointing to an expected Federal Reserve rate-cutting cycle. He acknowledged regulatory uncertainty, including Coinbase's court loss the prior week, and said that although the current administration is hostile to the sector, the November 2024 U.S. elections could be a major catalyst. "It's tough to get too one-way until then," he said.
According to Bloomberg's December 2023 reporting, crypto hedge funds began positioning for this shift before the ETFs launched. The sector had been hit hard in 2022, when flagship funds such as Pantera Capital fell by 80%. Performance improved as Bitcoin recovered; Stoka Capital, founded by a Goldman Sachs alumnus and investing mostly in altcoins, gained 268% by the end of November 2023.
New crypto hedge funds that invest across public and private markets, from liquid tokens to company equity, have also emerged. Schwartz previously reported on Split Capital, launched in January 2024 by alumni of LedgerPrime, a trading firm later acquired by FTX. Additional LedgerPrime alumni launched another fund in February, which Schwartz notes points to growing interest from limited partners.
The latest entrant is Lekker Capital, founded by Quinn Thompson, who previously worked at digital asset lender Maple Finance and at Guggenheim Partners. Thompson told Fortune he is targeting a $20 million raise and expects to begin trading in May 2024. Unlike many crypto funds concentrated in liquid tokens, Lekker will hold digital native tokens and public equities, including Bitcoin miners, MicroStrategy and Coinbase, in roughly equal proportions. Thompson argues the market has been dominated by venture-style investment in private companies and was over-allocated in the previous cycle, and that venture liquidity events depend on IPOs or token launches without enough allocator capital to provide liquid-market demand.
Thompson views the macro backdrop as supportive, pointing to an expected Federal Reserve rate-cutting cycle. He acknowledged regulatory uncertainty, including Coinbase's court loss the prior week, and said that although the current administration is hostile to the sector, the November 2024 U.S. elections could be a major catalyst. "It's tough to get too one-way until then," he said.
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