After years on the fringes, crypto hedge funds entered 2025 hoping for a breakout. New regulations, White House support and billions in institutional capital were meant to drag crypto out of the frontier into the mainstream. Instead, the year laid bare crypto’s unforgiving terrain, even for professionals built to profit from volatility. Through November, directional funds — designed to profit from large price swings in Bitcoin and other major coins — are down 2.5%, on pace for their worst year since the industry’s 2022 winter, when many fell 30% or more, according to Crypto Insights Group.
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