Trend Funds Find Footing After Choppy Year

Choppy cryptocurrency markets proved challenging for trend-following funds throughout 2025, leading to significant losses as volatile price swings erased prior gains. XBTO's trend fund, for instance, concluded 2025 down 7.8%, with industry-wide quant trend funds returning only 0.44% for the year, a stark contrast to their 65% performance in 2024.

This trend of underperformance was partly due to sharp reversals in major cryptocurrencies like Bitcoin, which fell significantly from its October peak. Models that profited from upward momentum were "whipsawed" by these rapid downturns. In contrast, market-neutral strategies, which avoid directional bets, demonstrated resilience by gaining 14.7% in 2025.

However, recent trading activity in January 2026 has offered a boost to some trend-following strategies. XBTO's fund reported a 13.3% rise last month, its second-best performance since its February 2024 launch. This gain was achieved by adeptly shifting to short positions in the final week of January as crypto markets declined. This timely adjustment allowed the fund to capture significant returns during the downturn.

XBTO manages approximately $100 million across its funds and plans to raise an additional $100 million this year. The firm's trend fund specifically trades crypto perpetual futures, focusing on highly liquid tokens, and utilizes a systematic momentum model that analyzes market and blockchain data. The firm, founded by ex-SAC Capital trader Philippe Bekhazi, is regulated in Bermuda and Abu Dhabi.