This hedge fund focused on Bitcoin significantly outperformed Bitcoin itself last year.
210k Capital, the investment vehicle for UTXO Management, ranked as the fifth best-performing hedge fund overall in 2024 according to industry reports. It achieved a remarkable 164% return after fees for the year. UTXO Management serves as the investment division of BTC Inc., known for its associations with Bitcoin Magazine and the Bitcoin Conference.
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Single-manager hedge funds are operated by a sole entity, unlike multi-manager or fund-of-funds models, which engage multiple managers.
In its recap of the 2024 Global Hedge Fund Industry Report for Q4, HFR disclosed that hedge funds specializing in cryptocurrency emerged as the foremost segment within the overall hedge fund landscape. Its index for cryptocurrency funds recorded a 59.81% return in 2024.
The stellar performance of UTXO Management in 2024 places it in discussions alongside top hedge funds that emphasize traditional asset classes. Its success can largely be attributed to Bitcoin — specifically, companies within the Bitcoin sector.
Tyler Evans, Co-founder and Chief Investment Officer of UTXO Management, noted that the fund’s exceptional returns were primarily driven by strategic investments in Bitcoin-focused companies, notably Strategy (previously MicroStrategy) and Metaplanet.
“In the past year, we made substantial investments based on the Bitcoin treasury play, as we saw the potential through Saylor’s initiatives and the chance to extend its global reach… We committed heavily to this strategy in 2024, investing in both Strategy and Metaplanet in Japan, where we were the initial Bitcoin investors for the firm,” Evans conveyed.
Approximately 80% of the hedge fund’s portfolio is in Bitcoin equities, which played a significant role in 210k Capital’s outperformance in 2024. Part of this investment consists of publicly traded Bitcoin mining entities, but the real profit generators have been Metaplanet and Strategy, with 210k Capital having stakes in the latter since the inception of its Bitcoin strategy.
According to Evans, these firms provide a unique form of securitized Bitcoin exposure, making it accessible for a wide range of investors, from institutions to IRAs and pension funds, thus significantly expanding the investable landscape in recent years.
This transformation reflects a strategic pivot from courting active, self-made high-net-worth individuals to appealing to more passive investors managing capital pools.
“We identified a growing demand for institutional capital to gain exposure to Bitcoin, and these Treasury companies are key in securitizing Bitcoin for fixed-income investors, insurance funds, and mutual funds,” Evans explained.
“Institutional allocators have stringent mandates regarding the types of instruments they can invest in. This strategy of securitizing Bitcoin in various formats enhances the ease of investment for these institutional entities.”
Additionally, Bitcoin ETFs which received approval in January 2024, provide liquidity. With influential entities like BlackRock advocating for a 5% allocation to Bitcoin, the perception of Bitcoin among investors is shifting. Notably, the Wisconsin Teacher’s Pension Fund and the Abu Dhabi Sovereign Wealth Fund have started incorporating Bitcoin ETFs into their portfolios.
Next: Expanding Bitcoin Treasury Companies Globally
Defending a championship title is always tougher than winning it, and with Bitcoin’s decline this year, a pressing question arises: can 210k Capital surpass 2024’s achievements?
Evans stated that the fund employs various hedging strategies, yet remains “extremely bullish” on Bitcoin as it approaches 2025. It is equally optimistic about replicating the corporate Bitcoin treasury strategy pioneered by Michael Saylor’s Strategy in other financial markets.
“We believe every tier-one financial market globally presents an opportunity for a Bitcoin treasury company,” he expressed.
UTXO Management played a crucial role in establishing Metaplanet’s Bitcoin treasury in Japan. Evans served as an independent director, while UTXO Management partner Dylan Leclair led the firm’s Bitcoin strategy. Another UTXO portfolio company, The Smarter Web Company, is primed for an IPO on the Aquis Exchange in the U.K. this week.
Read: Examining England’s Metaplanet as The Smarter Web Company Aims for UK IPO with Bitcoin Strategy
Public Bitcoin treasury companies such as Metaplanet facilitate traditional investors’ access to Bitcoin, especially in markets like Japan, where native Bitcoin ETFs are nonexistent and access to U.S.-based ETFs is restricted. This, combined with Japan’s low interest rates and favorable capital gains tax on equity cryptocurrencies, gives Metaplanet an advantage in capturing market share, according to Evans.
UTXO is looking at several markets for incubating Bitcoin treasury companies, including regions in Latin America, Central America, the Middle East, Australia, Thailand, and Vietnam. Initiatives in some of these markets are already underway at various development stages, with some readying for IPOs and others in capital-raising phases.
“The interest from experienced entrepreneurs who are eager to introduce this model in their local markets is rapidly increasing,” he noted.