Crypto Funds Shift Focus from Cryptocurrencies to Traditional Assets

Crypto hedge funds are redirecting their focus from digital tokens to traditional assets such as commodities, equities, and indices due to compressed core crypto returns.

The trend is driven by narrowing opportunities in crypto markets, where strategies like basis trades have seen returns decline from high double digits to around 5% to 6%, while stablecoin lending yields have dropped from as high as 30% to low single digits.

Geopolitical tensions have also added momentum to the shift, with weekend trading in oil contracts on Hyperliquid providing an early indication of market positioning before traditional exchanges reopen.

Fund managers are adapting by applying familiar quantitative strategies to these newer markets, focusing on pricing inefficiencies rather than outright directional bets. This approach appears to be gaining traction across the industry.