So far in 2026, the market has remained difficult for crypto liquid and hedge funds. Bitcoin remains well below its October highs, perpetual futures open interest has fallen, and DeFi activity has slowed. But several investors and analysts said the industry is becoming more mature and far more selective. Andy Martinez, founder and CEO of Crypto Insights Group, said the gap between top- and bottom-quartile fund managers continues to widen, while Ray Hindi, co-founder and managing partner of L1D, described the current environment as "healthy for a very few [funds] and very tough for most."
One reason for that growing gap is asset selection. Ryan Watkins, co-founder of Syncracy Capital, said passive exposure to major crypto assets has generally not worked well this year, while concentrated exposure to a small number of outperformers such as Hyperliquid's HYPE has. "I can't share our returns, but it's been a great year for us so far," Watkins said. Richard Galvin, executive chairman and chief investment officer at Digital Asset Capital Management, similarly said holding tokens such as Hyperliquid, Morpho, and Zcash has been one of the key factors separating strong performers from the rest of the market.
