Crypto fund performance by strategy: quant vs. discretionary vs. long-only
Crypto fund performance by strategy: the complete comparison
Quant, multi-strategy, long-only, fund of funds, or index tracker? We compared every strategy on returns, risk, drawdowns, beta, and fees. Here’s the full scorecard from 314 funds.
to Bitcoin (SI)
beta to Bitcoin
max drawdown (SI)
in database
- ✓Quant funds have the best risk profile: median beta to Bitcoin of 0.10, median Sharpe of 1.53, and median max drawdown of -20.7%. They also posted the only positive strategy average in 2025 (+0.4%).
- ✓Long-only funds have the worst risk profile: median beta of 0.84, median Sharpe of 0.92, and median max drawdown of -71.5%. Zero of 15 long-only funds posted a positive return in 2025.
- ✓Multi-strategy sits in the middle on every metric: median beta 0.44, Sharpe 1.22, max drawdown -29.2%. It’s the diversified option that avoids the extremes.
- ✓Index/tracker products are structurally disadvantaged: median beta of 1.02 (they are the market), median max drawdown of -78.7%, and they charge fees for what is essentially passive exposure.
- ✓In 2025, strategy selection explained more of the return variance than manager selection. The gap between the best strategy (quant +0.4%) and worst (index -24.4%) was 25 percentage points.
The strategy scorecard
This table is the reference. It compares every major crypto fund strategy category across 8 metrics, all computed from our database of 314 funds with since-inception performance data.
| Strategy | # Funds | Median Sharpe (SI) | Median beta | Median max DD (SI) | Median corr to BTC | 2025 avg return | % positive 2025 |
|---|---|---|---|---|---|---|---|
| Algorithmic/Quant | 116 | 1.53 | 0.10 | -20.7% | 0.34 | +0.4% | 58% |
| Fund of Funds | 29 | 1.37 | 0.15 | -18.1% | 0.67 | -13.0% | 25% |
| Multi-Strategy/Other | 82 | 1.22 | 0.44 | -29.2% | 0.65 | -2.4% | 50% |
| Long Only | 56 | 0.92 | 0.84 | -71.5% | 0.79 | -15.3% | 0% |
| Index/Tracker | 20 | 0.55 | 1.02 | -78.7% | 0.83 | -24.4% | 14% |
Read this table column by column and a clear hierarchy emerges. On Sharpe ratio: quant leads, index trails. On beta: quant is nearly market-neutral (0.10), long-only and index are effectively the market (0.84 and 1.02). On max drawdown: quant loses 21% at worst, long-only loses 72%. On 2025 returns: quant is the only positive category.
The correlation column adds an important nuance. Quant funds have a median correlation of only 0.34 to Bitcoin. Fund of funds and multi-strategy are in the 0.65-0.67 range. Long-only and index are 0.79-0.83. This tells you how much diversification benefit each strategy actually provides. A strategy with 0.34 correlation to Bitcoin is genuinely diversifying your crypto exposure. One with 0.83 correlation is just a more expensive way to own Bitcoin.
All metrics are medians, not means. Medians are less distorted by outliers and give a better picture of the “typical” fund in each category. The Sharpe ratio and max drawdown are since inception. Beta and correlation are since inception vs. Bitcoin. The 2025 return column uses average (not median) to be consistent with the performance articles. Fund counts are from the full database; 2025 return data is from the 84 funds that reported through December 2025.
Algorithmic/quant funds
The numbers tell the story: quant funds are the best risk-adjusted strategy in crypto. They have the lowest beta (0.10), the lowest correlation to Bitcoin (0.34), the highest Sharpe ratio (1.53 median), and the shallowest drawdowns (-20.7% median max DD). In 2025, they were the only strategy to post a positive average return (+0.4%).
This category includes market-making strategies, statistical arbitrage, funding rate harvesting, cross-exchange arbitrage, and systematic trend-following. What they share is a reliance on algorithms and models rather than human discretion, and the ability to go both long and short.
The tradeoff is lower absolute returns in bull markets. When Bitcoin triples, a quant fund making 15-20% looks modest. But over a full cycle, when you include the bear market where Bitcoin drops 64% and the quant fund drops 5%, the compounding math usually favors the quant strategy. A fund that goes +15%, +18%, -5%, +12% over four years compounds to +45%. A buy-and-hold that goes +300%, -64%, +155%, -6% compounds to a higher number, but the investor’s actual experience (and the drawdowns they have to survive psychologically) is dramatically worse.
The median quant fund down-capture ratio in our database is -0.04, which essentially means the typical quant fund captures almost none of Bitcoin’s downside. The up-capture is 0.24, meaning it captures about a quarter of Bitcoin’s upside. That asymmetry is the entire value proposition.
For a deeper look at quant strategies, see our quant crypto hedge fund guide.
Multi-strategy funds
Multi-strategy is the middle ground on every metric. Median Sharpe of 1.22 (solid, not exceptional). Median beta of 0.44 (partially directional, partially hedged). Median max drawdown of -29.2% (painful but survivable). In 2025, multi-strategy averaged -2.4% with 50% of funds posting positive returns.
The appeal of multi-strategy is diversification within a single fund. Rather than allocating to one approach, you get a portfolio of approaches: some directional, some market-neutral, some event-driven. The manager rotates capital between strategies based on opportunity set and market conditions.
The risk is that “multi-strategy” can mean almost anything. The 2025 dispersion within multi-strategy was the widest of any category: the best multi-strat fund returned +108%, the worst lost 47.9%. That 156-point gap means manager selection within multi-strategy matters more than in any other category. Two funds both labeled “multi-strategy” can have radically different risk profiles.
Our database includes 82 multi-strategy funds. The key due diligence question: what are the actual sub-strategies being run, and how is capital allocated between them? A multi-strat that is 80% directional long with a small arbitrage sleeve is a very different product from one that is 50% market-neutral and 50% event-driven.
Fund of funds
Fund of funds have surprisingly good risk metrics: median Sharpe of 1.37 (second-best after quant), low beta of 0.15, and the shallowest median max drawdown of any category at -18.1%. The diversification across multiple underlying managers genuinely smooths returns.
The problem is the fee layer. A FoF typically charges 1% management + 10% performance on top of the underlying funds’ 2/20. Over time, this fee drag compounds into a meaningful return shortfall. In 2025, FoFs averaged -13.0% despite having low beta and diversified exposure. Only 25% of FoFs posted positive returns.
The honest assessment: if you have the expertise and capital to allocate directly to 4-6 underlying managers, you’ll almost certainly get a better net return than going through a FoF. The FoF is best suited for allocators who want crypto exposure but lack the in-house resources to evaluate individual crypto fund managers. For those allocators, the fee is a payment for outsourced manager selection and monitoring, which has genuine value. But be clear about what you’re paying for. See our fund of funds guide for the full fee math.
Long-only funds
Here is the honest part. Long-only crypto funds have a structural problem, and the data makes it impossible to ignore.
Median beta of 0.84 means a long-only fund moves roughly in lockstep with Bitcoin. Median max drawdown of -71.5% means the typical long-only fund has, at some point in its life, lost more than two-thirds of its value. The median Sharpe of 0.92, below 1.0, means the risk-adjusted return does not clear the threshold most institutional allocators consider “good.”
In 2025, zero of 15 long-only funds posted a positive return. Zero. Bitcoin was only down 6.3%. The average long-only fund lost 15.3%. They underperformed a simple buy-and-hold BTC position by 9 percentage points.
The question allocators should ask: if a long-only crypto fund has a 0.84 beta to Bitcoin, charges 2% management and 20% performance, and underperforms a spot Bitcoin ETF at 0.25% per year, what exactly are you paying for? The answer, in theory, is token selection alpha: the manager’s ability to pick tokens that outperform Bitcoin. In 2025, at least, no one in our database delivered it.
Long-only funds can justify their fees in one specific scenario: a bull market where altcoins significantly outperform Bitcoin and the manager’s token selection captures that rotation. That happened in 2021. It has not happened since. See our Bitcoin comparison for the multi-year record.
Index and tracker products
Index/tracker products are the worst-performing category on almost every metric. Median Sharpe of 0.55 (below the S&P 500). Median beta of 1.02 (they ARE the market). Median max drawdown of -78.7% (worse than any active strategy). In 2025, they averaged -24.4%, nearly four times worse than Bitcoin’s -6.3% decline.
Why do index products lose more than Bitcoin when they’re designed to track it? Two reasons. First, several products in this category are futures-based (like the ProShares Bitcoin Strategy ETF and the Valkyrie Bitcoin Strategy ETF). Futures-based products suffer from contango drag: the cost of rolling futures contracts at expiry, which consumes 5-15% per year in a normal contango environment. In a declining market, this drag compounds the losses. Second, some tracker products include altcoin exposure, and altcoins dropped more than Bitcoin in 2025.
Spot Bitcoin ETFs (which launched in the US in January 2024) should perform much closer to Bitcoin itself, with minimal tracking error. But we don’t have enough history with those products to separate them out in the data yet.
If you want passive crypto exposure, use a spot Bitcoin ETF at 0.25% annual fee. It will outperform every futures-based index product in our database over time. The only reason to use an index/tracker product from our database is if you want diversified crypto exposure (not just Bitcoin) and cannot or do not want to select individual tokens yourself. Even then, the fee-adjusted performance is hard to justify.
How each strategy performed in 2025
2025 was the clearest strategy differentiation year since 2022. In a year when Bitcoin fell 6.3%, the gap between the best and worst strategy categories was 25 percentage points.
The hierarchy in 2025 maps perfectly to the long-term risk metrics. Quant funds (lowest beta, lowest correlation) held up best. Multi-strategy (moderate beta) came next. Long-only and index (high beta, high correlation) were hit hardest. This is not a coincidence. The risk metrics predict how strategies will behave in a drawdown, and 2025 confirmed the prediction precisely.
For the full analysis of 2025 returns, see our annual performance review and best performing funds rankings.
Compare strategies with real data
The Performance Database lets you filter by strategy type, sort by Sharpe ratio, beta, or drawdown, and compare funds side by side. See which managers in each category actually deliver.
Explore the Performance Database → Free sampleChoosing the right strategy
The right strategy depends on your objectives, risk tolerance, and what role crypto plays in your broader portfolio.
If you want the highest risk-adjusted returns and can accept lower absolute returns in bull markets: quant/algorithmic. The data is unambiguous. Quant strategies dominate on Sharpe, beta, drawdown, and consistency. The tradeoff is muted upside when the market runs. For institutional allocators with a 3-5% crypto allocation who cannot tolerate large drawdowns, quant is the most defensible choice.
If you want diversified exposure with moderate risk: multi-strategy. It’s the balanced option. You get some upside capture, some downside protection, and broad exposure across crypto sub-sectors. The key is manager selection: the dispersion within multi-strategy is enormous, so the specific fund matters more than the category label.
If you want simple beta exposure at the lowest cost: spot Bitcoin ETF. Not a crypto fund. A spot ETF at 0.25% per year will almost certainly outperform the average long-only fund, the average index/tracker, and the average fund of funds over any multi-year period. If you just want to own crypto, this is the cheapest and most efficient way.
If you’re building a multi-manager crypto portfolio: blend quant (for risk-adjusted returns and diversification) with a selective multi-strategy allocation (for upside capture) and spot BTC (for cheap beta). This three-bucket approach is what the most sophisticated institutional allocators use. The specific weights depend on your drawdown tolerance and return targets.
FAQ
Which crypto fund strategy has the best Sharpe ratio?
Algorithmic/quant funds, with a median since-inception Sharpe ratio of 1.53 across 113 funds in our database. Fund of funds are second at 1.37. Long-only (0.92) and index/tracker (0.55) are lowest. See our Sharpe ratio analysis for more detail.
What is the typical max drawdown for each strategy?
Median since-inception max drawdowns by strategy: Fund of Funds -18.1%, Algorithmic/Quant -20.7%, Multi-Strategy -29.2%, Long Only -71.5%, Index/Tracker -78.7%. The difference between quant (-21%) and long-only (-72%) is enormous and reflects the fundamental difference in risk management between hedged and unhedged strategies. See our drawdown analysis for more.
Which strategy performed best in 2025?
Algorithmic/quant funds averaged +0.4% in 2025, the only positive category. Multi-strategy was next at -2.4%. Long-only averaged -15.3% and index/tracker averaged -24.4%. Bitcoin itself was -6.3%. Quant and multi-strategy both outperformed Bitcoin. See the 2025 annual review for the full analysis.
Are long-only crypto funds worth the fees?
The data suggests not for most long-only funds. With a median beta of 0.84 to Bitcoin, median Sharpe of 0.92, and zero positive returns in 2025, the typical long-only fund delivers near-market returns at hedge fund fees. A spot Bitcoin ETF at 0.25% annual fee would have outperformed the average long-only fund in 2025 by 9 percentage points. The only scenario where long-only justifies its fees is during altcoin seasons when token selection significantly outperforms BTC.
Where can I compare strategies side by side?
The CFR Performance Database lets you filter by strategy type and sort by any metric: Sharpe, beta, drawdown, return, or any of 60+ risk measures. You can also view individual fund profiles with monthly return series to see how each fund actually behaved during specific market environments. A free sample is available.