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HFR launches powerful expansion of Cryptocurrency hedge fund classification system, adds innovative detail and specialization of 11 sub-strategies

HFR Cryptocurrency Index has soared +694.6% over trailing five-year period

CHICAGO, (March 17, 2025) – HFR, the global leader in the analysis and tracking of hedge fund strategies and performance, is pleased to announce the launch of an expanded strategy classification system for hedge funds and alternative investment products focused on the Cryptocurrency and Blockchain space, with the introduction of 11 innovative, sophisticated and specialized sub-strategies. Building on its legacy of global leadership and innovation in the indexation, analysis and research of the global hedge fund industry, HFR’s strategy expansion offers granular insights into the unique and specific investment strategies available for investment in the exciting and rapidly evolving Cryptocurrency and Blockchain space.

Over the five-year period ending February 2025, the HFR Cryptocurrency Index (Ticker: HFRBCC) has produced a stratospheric annualized return of +51.4 percent and an astounding cumulative gain of +694.6 percent, with annualized volatility of 59.5 percent.

“HFR’s powerful expansion of the Cryptocurrency and Blockchain sub-strategies constitutes a defining, inflection point in the historic evolution of the global hedge fund industry, capturing the specialized detail and explosive growth of the space, and delineating a modular, cohesive framework for investors to increase their understanding and awareness of these high-growth strategies for investment and benchmarking purposes. In the same way HFR pioneered the standard strategy and sub-strategy benchmarks against which all hedge funds are now measured, we are bringing that same level of specificity and granularity to the fast-moving and ever-evolving crypto hedge fund universe,” stated Kenneth J. Heinz, President of HFR. “HFR was a leader in this space with our first crypto index launch in 2017 and has continued to build its leadership position by enabling investors and hedge fund managers to build more valuable peer groups and conduct more focused investment research on funds that specialize in this area.”

Download HFR’s research report of the new sub-strategies at https://www.hfr.com/family-indices/hfr-blockchain and access indices at https://www.hfr.com/family-indices/hfr-blockchain

NEW CRYPTOCURRENCY/BLOCKCHAIN CLASSIFICATIONS & DEFINITIONS

 

Main Strategy

Cryptocurrency/Blockchain (Index Ticker: HFRBCI)

Cryptocurrency/Blockchain funds invest primarily in cryptocurrencies and/or blockchain related technologies.

Sub-Strategies

Cryptocurrency – Arbitrage

Funds in the Arbitrage sub-strategy utilize investment techniques intended to profit from differences in the pricing of cryptocurrencies between exchanges, OTC desks, countries and the various ways in which exposure to cryptocurrencies can be obtained. These funds may also seek to profit from the pricing available in the spot vs. futures market for various cryptocurrencies, and to capitalize on the mispricing of cryptocurrencies within various types of investment structures.

Cryptocurrency – Fundamental (Index Ticker: HFRBCFN)

Funds in the Fundamental sub-strategy invest or go short cryptocurrencies based on the manager’s fundamental valuation of the price of such cryptocurrency based on its ability to either be a store of value, medium of exchange, or to provide additional types of utility.

Cryptocurrency – Market Neutral

Funds in the Market Neutral sub-strategy utilize investment techniques intended to profit from the cryptocurrency market without taking on significant directional exposure in specific cryptocurrencies.

Cryptocurrency – Passive Multicurrency

Funds in the Passive Multicurrency sub-strategy invest passively across multiple cryptocurrencies, such as the top 3 – 5 largest cryptocurrencies by market capitalization, or seek to replicate a cryptocurrency index containing a basket of cryptocurrencies pursuant to an index methodology.

Cryptocurrency – Passive Single Currency (Index Ticker: HFRBCPS)

Funds in the Passive Single Currency sub-strategy invest in a single cryptocurrency to provide access to that specific investment type. For example, prior to the launch of Bitcoin ETPs in the United States there were private funds established to provide exposure to Bitcoin.

Cryptocurrency – Quantitative (Index Ticker: HFRBCQT)

Funds in the Quantitative sub-strategy use quantitative techniques of analyzing price data, volume and other market characteristics to ascertain information about future price movements and relationships among cryptocurrencies.

Cryptocurrency – Volatility

Funds in the Volatility sub-strategy invest in cryptocurrency-related derivatives and seek to profit from the creation of a portfolio of positions that can produce significant risk-adjusted returns from changes in the volatility priced into said derivatives.

DeFi (Index Ticker: HFRBDFI)

Funds in the DeFi sub-strategy invest in decentralized finance transactions that take place through decentralized finance protocols which do not utilize trusted intermediaries. These protocols support peer-to-peer finance transactions.

Infrastructure

Funds in the Infrastructure sub-strategy invest in companies developing blockchain or other distributed ledger technologies which are fundamentally disintermediating payments, banking, market trading structure, Internet of Things (IoT), healthcare, remittances, supply chains, digital identity and more. Infrastructure funds may also engage in cryptocurrency mining.

Multi-Strategy

Multi-Strategy funds invest across multiple cryptocurrency- or blockchain-related sub-strategies where no single strategy is regularly more than 50% of the fund’s investment approach.

Fund of Funds – Cryptocurrency/Blockchain

Fund of Funds invest in multiple hedge funds or alternative investment products employing cryptocurrency- or blockchain-related investment strategies. Funds of Funds may invest with numerous managers within a single strategy, or with numerous managers in multiple strategies. The typical objective is to lower risk (volatility) compared to investing with a single manager. Fund of Funds managers have discretion in choosing which strategies to invest in for the portfolio.