Could $10–20 Billion in Crypto Hedge Fund Redemptions Pressure Bitcoin?

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Why this report matters

While we have warned that tax-loss selling into December could exert downward pressure on Bitcoin, investor redemption requests from crypto hedge funds may pose an even greater headwind for prices. At 10x Research, our focus is on tactical trading and the identification of directional turning points in the market. Our analysis flagged the risk of a correction starting in February 2025 (here), turned constructively bullish in mid-April (here), and, by late October (here), warned that Bitcoin was entering a bear market. Not every market call will be correct, but many have been, and while much of the market continued to focus on upside scenarios, we warned early about the potential onset of a bear market (video here).

Importantly, from the start of the year, we also advised traders to hedge Bitcoin long exposure with a basket of altcoin shorts (here), reflecting our particularly bearish view on the broader altcoin complex. This approach would have delivered meaningful long/short, relative-performance alpha, precisely the type of outcome many crypto hedge fund managers are now seeking as they confront an increasingly challenging environment in 2025 and in 2026. If they are still in business.

Annual Returns: Bitcoin vs. Crypto Hedge Fund Benchmark Indices

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