Best Performing Cryptocurrency Funds for 2024

Grayscale

AUM: $23.2B

Founded in 2013, Grayscale quickly evolved into the world’s largest digital currency asset manager. In 2021, the firm achieved 73.4% coverage of the digital currency market, with a wide range of investment products, including single-asset trusts and diversified crypto DeFi funds.

Despite experiencing a decline of over 50% in 2022, this fund remains the largest crypto asset manager in 2023, with a total AUM of over $20 billion. At their peak, Grayscale had a total AUM of $43.5 billion.

If you are looking for a truly crypto-focused investing firm, Grayscale is the clear winner. The numbers speak for themselves. With over $20 billion AUM, they are the largest and most respected digital asset investment firm currently operating globally.

(BMJ Score: 4.70)

500 Global

AUM: $3.0B

Originally launched as 500 Startups, the Silicon Valley-based early-stage VC capital firm has a portfolio valued at over $1B across 2,800 firms spanning 75+ countries.

Investing across a wide range of sectors, they support blockchain and cryptocurrency startups, including BlockCypher and Hijro.

As of 2023, 500 Global has funded 51 unicorns, each valued over $1 billion, and more than 140 centaurs (startups individually valued at more than $100 million).

For investors looking at overall consistency, 500 Global is a fantastic choice. Their Global Fund has an incredible track record, nurturing over 50 tech unicorns and 140 startups valued at over $100 million. But they are not a “pure crypto” fund.

(BMJ Score: 4.60)

Pantera Bitcoin Fund

AUM: $3.8B

As the first US-based institutional asset manager to focus exclusively on a blockchain, Pantera Capital has been a pioneer in crypto funds since 2013. Over the years, they have launched four crypto-focused funds and led over 100 out of 210 investments.

From $57 million invested in 28 companies, Pantera has realized over $242 million in ROI.

If longevity is important to you, then Pantera Capital’s Bitcoin Fund is a great choice. As one of the first companies to open a crypto-based fund, they have an extensive track record and deep experience in the space.

(BMJ Score: 4.40)

a16z Crypto

AUM: $4.56B

a16Z is the representative firm for Andreessen Horowitz in the crypto space. Founded in 2009, a16z launched its dedicated crypto fund in 2018. Since then, the fund has moved aggressively in the crypto bear market, raising $4.5 billion in 2022.

In total, a16z has four separate funds investing in digital assets, Web3, and blockchain startups.

Andreessen Horowitz is a well-known name in the crypto space, and investors have valued their analysis of the markets and the future direction of crypto for years. While they took their time establishing a fund, it quickly grew to see the second-largest amount of assets under management. If bigger is better, then a16z Crypto is a good fund choice.

(BMJ Score: 3.80)

CoinShares

AUM: $2.24B

Launched in 2014, CoinShares is Europe’s first and largest bitcoin investment fund. They provide diversified exposure to digital assets through a wide array of crypto ETFs, ETPs, and other multi-asset portfolios.

In 2021, CoinShares International became a public company listed in Sweden and featured on the Nasdaq First North Growth Market. In Q2 2023, Coinshares would proudly announce a comprehensive profit of $6.4 million, as opposed to a $727k loss during the same period of last year.

Europeans looking for a way to diversify into the crypto space could do far worse than to choose CoinShares. The fund has a long history and has proven its ability to generate profits.

(BMJ Score: 3.6)

Galaxy Digital Capital Management

AUM: $1.9B

The New York-based investment firm is focused on digital assets and blockchain technology. The firm uses a hybrid hedge fund/VC fund model. Founded by Michael Novogratz, its AUM grew by almost 600% in 2021 during the last crypto bull run.

As of 2023, the firm has invested in over 229 companies across the crypto ecosystem and is involved in everything from trading to mining, investment banking, asset management, and VC funding.

Galaxy Digital Capital Management has a broad and diverse investment portfolio that stretches across the crypto ecosystem, making it an excellent choice for those looking for diversity in their crypto fund.

(BMJ Score: 3.0)

Polychain Capital

AUM: $2.0B

Polychain Capital, founded by Olaf Carlson-Wee, the first employee at Coinbase, seeks to provide its investors with “exceptional” returns through active management strategies. The fund invests in digital currencies and not companies.

The fund has made over 168 investments since its launch, including Ava Labs, Coin DCX, and Dfinity. In 2023, Polychain Capital led SPACE ID’s strategic funding round and Cubist Inc.’s seed round, respectively, worth $10 million and $7 million.

For those looking for a fund investing directly in cryptocurrencies rather than crypto companies, Polychain Capital is an obvious choice. The fund has grown through both bull and bear markets, proving it has staying power.

(BMJ Score: 3.00)

Multicoin Capital

AUM: $2.8B

Founded in 2017 by Kyle Samani, Multicoin Capital is a thesis-driven investment firm based in Austin, Texas. The firm invests primarily in cryptocurrencies, tokens, and blockchain startups across Layer 1, Layer 2, infrastructure, enterprise, mobile, and other categories. Notable investments in the Multicoin portfolio include Algorand, Flow, Ethereum, Lido, and Tagomi.

The Multicoin fund reportedly gained 100.9% early in 2023 to bring the fund’s inception-to-date return to $2,866%.

Multicoin Capital is another good choice for those who want actual cryptocurrency exposure in their fund. The fund shines in bull markets, so if you think the market is ready to rally, this could be a good place to park some funds.

(BMJ Score: 2.80)

Alphabit Fund

AUM: $1.0B

This crypto hedge fund seeks to generate capital appreciation while reducing risk. Their strategy involves early-stage investments in over 25 crypto projects, automated trading on futures, and discretionary trading on higher liquidity cryptocurrency pairs. Since 2020, Alphabit has made major investments in NFTs, blockchain gaming, and DeFi in particular, with startups like Yield, Archax, and GamiFi.

As of 2023, Alphabit Fund would consistently participate in 2-6 deals per year, with an average round investment of $6M for portfolio companies. Consistent action has helped to guide Alphabit’s recovery from 2022’s events.

Risk-averse crypto investors will appreciate the hedging strategies employed by Alphabit to reduce risk while delivering capital appreciation.

(BMJ Score: 2.60)

AltaIR Capital

AUM: $600M

AltaIR Capital is an Israel-based venture capital fund founded in 2010 to focus on investments in the technology sector. The fund invests in startups covering FinTech, InsurTech, Blockchain, SaaS, MedTech, AI, Cyber, and Consumer Internet.

There are over 300 companies in the Altair portfolio, including crypto-focused firms like  REGA Risk Sharing, Unifimoney, and Anytype.

AltaIR’s broader focus on the entire technology sector means it isn’t a pure crypto play, but some investors will find that a benefit. We found that AltaIR is good for exposure to all types of emerging technologies, with an emphasis on Web3.

(BMJ Score: 2.20)

Altana Digital Currency Fund (ADCF)

AUM: $33M

Part of Altana Wealth, ADCF has been trading in major cryptos in proportion to their market capitalization. Active since 2014, it has achieved phenomenal success with long and short strategies, deploying up to 50% of its assets trading cryptos.

Altana Digital Currency Fund focuses primarily on bitcoin, but uses a number of niche strategies with low correlation to other assets in order to gain a market edge. Returns are good, but a large minimum investment of $100,000 keeps Altana out of reach for most retail investors.

(BMJ Score: 2.20)

1Confirmation

AUM: $1.0B

1Confirmation is an investment fund founded by Nick Tomaino with backing from Peter Thiel, Marc Andreessen, and Mark Cuban that invests in blockchain startups and digital tokens. Investments have included BTC, ETH, BAT, MakerDAO, and Augur.

The fund raised over $125 million in 2021 for crypto startups and digital tokens and followed it up with another $100 million in 2022 for NFT projects. As of 2023, the fund portfolio has 39 projects, including major cryptos, Coinbase, OpenSea, and Nexus Mutual.

1Confirmation invests in both pure cryptocurrencies and up-and-coming blockchain companies to create its diversified portfolio. The small size of its team means decision making is more focused, but also keeps the BMJ score low as we do prefer a broader investment team.

(BMJ Score: 2.00)

3iQ Corp Digital Asset Management

AUM: $700M

Founded in 2012 by Jean-Luc Landry and Fred Pye, 3iQ is Canada’s largest digital asset manager. It has multiple fully regulated multi-asset crypto investment funds that provide accredited investors with exposure to digital assets such as bitcoin, Ether, and Litecoin.

While the 3iQ Bitcoin ETF has performed well in 2023, the lack of extensive history and relatively small AUM has held the fund back in our ratings. It’s still worth looking into, but we’d prefer to see more history.

(BMJ Score: 1.3)

Best Crypto Fund for Smaller Investors

There are plenty of options for individual investors with more modest holdings. Suppose you want to invest smaller amounts in cryptos and digital tokens. In that case, the following are our top picks:

• Bitcoin and Crypto ETFs: An exchange-traded fund (ETF) is an investment fund that tracks the value of a particular underlying asset. Usually, the asset is a commodity like gold/oil, a basket selection of stocks, or a significant index. You can invest in ETFs just as you would in stocks. To learn more check out our article on the Best Crypto ETFs.
• Bitcoin and Crypto Stocks: The wealth potential of crypto isn’t just tied to the currency but to the companies building this technology. The stock of companies that benefit from the rise of blockchain and cryptos are called “block stocks.” For investors looking at indirect exposure to cryptos, block stocks are an interesting choice. (To learn more about the topic, visit our Blockchain Stocks page.)
• Crypto Mutual Fund Alternatives: There are currently no mutual funds linked to crypto. The reason is quite simple – mutual funds have strict regulatory constraints that prevent them from looking at high-risk assets like cryptos. But if you want investment options that resemble mutual funds, alternatives do exist. Apart from ETFs, there are other exchange-traded investment products, crypto hedge funds, and tokenized funds. (See our page on Top Crypto Mutual Fund Alternatives.)

The Best Crypto Fund Alternative: Do It Yourself

The decentralized ethos of blockchain and crypto has always fostered a do-it-yourself spirit. If you are up for extra effort and self-education, you can take charge of your crypto investments instead of leaving it to fund managers.

Remember some basic requirements and starting principles:

• Think Long-Term: if you put money into something blindly without adequate research/preparation, it is gambling. Avoid chasing after the next meme coin in search of 100x returns; plan on buying a handful of high-quality digital assets, then hold on to them for 5+ years.
• Pay Off Your Debts First: before investing in high-risk avenues like crypto, clear all your existing short-term loans and debts, primarily credit card debts. (Mortgages and student loans are considered “better” debt because they tend to hold their value or increase your earning potential).
• Build a Savings Cushion: keep aside a fund of at least six months’ expenses in case you need it in an emergency. After paying off all debts, accumulate some savings before even considering investing in crypto.

Once you have followed these steps, we can safely invest in cryptocurrencies. Follow these basic strategies to get off to a smooth start:

1. Buy a handful of high-quality digital assets: As the most popular and valuable crypto, bitcoin is an excellent option for beginners. You can also opt for other altcoins if you want, but try to stick with the top ten coins – they tend to have the maximum liquidity and reliability. (See our Future Winners Portfolio for our top picks.)
2. HODL for the long term: Constant trading is not recommended, especially for beginners. Long-term holding (or HODLing) has been the best way to generate excellent returns. See our Blockchain Believers Portfolio for the eye-popping returns our crypto investor community has achieved in just a few years.
3. Build a portfolio: Consider combining crypto assets with traditional investments like stocks and bonds. (We call it the “Blockchain Believers Portfolio.”) In this approach, you could potentially outperform conventional investors by simply keeping 10% of your investment as crypto while maintaining 50-60% stocks and 20-30% bonds.

Investor Takeaway

These funds represent a significant piece of the crypto pie, and as such, they impact how investors look at their portfolios. Like traditional investing, crypto investors might look into these funds as investment vehicles.

The crypto fund landscape would heavily benefit from their approval through enhanced liquidity, increased regulations, and facilitating easier entry for traditional investors into the crypto markets.

If you want to learn more about investment opportunities in the digital currency markets, subscribe to the Bitcoin Market Journal newsletter today!