Cryptocurrency funds face a downturn in 2026.

• Cryptocurrency funds prioritize fundamentals and real revenue.
• Altcoins are losing ground to selective strategies.
• Institutional investors broaden their focus on tokenization.

The cryptocurrency market remains challenging for liquidity funds and hedge funds In 2026, however, managers and analysts observe an important transformation in the way capital is being distributed. Instead of a broad appreciation of digital assets, the current period has favored more selective strategies and projects that deliver concrete results.

While Bitcoin remains far from its October highs and indicators such as perpetual futures contracts and DeFi activity show a slowdown, many industry participants believe the market is going through a maturing phase. In this environment, the gap between top-performing funds and those struggling has widened significantly.

According to several managers, asset selection has become one of the main success factors. Passive exposure to major cryptocurrencies did not deliver the same results observed in previous cycles. Conversely, concentrated positions in specific projects, such as Hyperliquid, Morpho, and Zcash, contributed to more significant results in some portfolios.

Ryan Watkins, co-founder of Syncracy Capital, highlighted this movement by stating: “I can’t share our returns, but it’s been a great year for us so far.” This assessment is shared by other managers who see a market more focused on fundamentals than on speculative narratives.

This shift also directly affects the altcoin market. Analysts note that projects capable of demonstrating functional products, revenue generation, and user growth continue to attract investment, while initiatives without consistent metrics face greater difficulty in raising funds.

“This is a moment of maturation for cryptocurrencies,” said Amir Hajian, a researcher at Keyrock. According to him, the market is undergoing a kind of natural filtering, favoring companies and protocols with stronger fundamentals.

Recent figures reinforce this perception. Data analyzed by Hajian indicate that approximately 85% of tokens launched in 2025 are currently trading below their initial prices. Furthermore, all assets launched with a fully diluted valuation exceeding $1 billion have depreciated since their debut.

The behavior of institutional investors is also changing. Andy Martinez, founder and CEO of Crypto Insights Group, states that capital providers are conducting increasingly detailed evaluations before choosing a manager.

“Investors are no longer just evaluating hedge funds. They are evaluating separately managed accounts, trustees, vaults, tokenized products, and passive vehicles, all competing for capital within the same ecosystem,” he said.

Institutional interest remains present, especially in areas related to tokenization and real-world assets. At the same time, market-neutral strategies are gaining ground among managers seeking to reduce their dependence on the direction of cryptocurrency prices.

Despite this interest, consolidation appears to be a growing trend. Experts believe that smaller funds may face more difficulties competing, especially given the expansion of ETFs and investors' search for more efficient structures. As a result, the sector may end the coming months with fewer participants, but with larger asset managers concentrating a more significant share of available capital.