A clutch of cryptocurrency-focused hedge funds has made a windfall in recent weeks as Donald Trump’s election win fuelled a powerful rally that propelled bitcoin above the $100,000 milestone.

Funds employing crypto strategies posted gains of 46 per cent in November, bringing their year-to-date returns to 76 per cent, according to data provider Hedge Fund Research. The returns have outpaced the broader industry, with the average hedge fund gaining 10 per cent in the first 11 months of this year, HFR said.

Brevan Howard Asset Management and Galaxy Digital, the cryptocurrency investment manager founded by billionaire Mike Novogratz, have been among the biggest winners from the recent surge in digital assets.

Crypto funds’ outsized gains come after Trump’s election victory in November added a fresh jolt of enthusiasm to this year’s rally in bitcoin, the biggest cryptocurrency, which has also sent smaller tokens soaring.

Bitcoin has risen 130 per cent this year to around $100,000, helping push the market value of major crypto tokens up by $1.8tn to $3.5tn, according to the FT Wiltshire Digital Assets Dashboard. The crypto market pulled back from recent highs this week after the Federal Reserve said it would cut rates less than expected next year, hitting risky assets.

Investors are betting that Trump’s crypto-friendly nominees for top government jobs will contrast with Joe Biden’s administration, which has generally taken a more sceptical approach.

“Trump’s election is great news for digital assets because it’s going to bring more clarity on the regulatory side,” said Damien Miller, managing partner at macro hedge fund MP Alpha Capital. “There will be an environment that is more friendly and collaborative towards bitcoin and blockchain.”

Brevan Howard’s main crypto fund gained 33 per cent in November, and is now up 51 per cent in the first 11 months of the year, according to investors. Brevan Howard, which has $35bn in assets, is one of the biggest hedge fund managers to have a devoted crypto business, which it launched in 2021.

Galaxy’s hedge fund strategy gained 43 per cent in November, and is up 90 per cent in 2024, according to investors. The New York-based group has more than doubled its assets under management in the past two years, to $4.8bn, in part by buying up assets from bankrupt crypto companies.

Galaxy and Brevan Howard declined to comment on their performance.

The recent surge in digital assets marks a staggering reversal in fortunes for a sector that was mired in a deep crisis beginning in 2022.

Bitcoin hit a low of around $15,500 when Sam Bankman-Fried’s FTX exchange collapsed in November 2022. Galaxy, which has sought to position itself as a full-service crypto financial services firm, posted a $1bn net loss that year.

The cryptocurrency industry received a fillip in January 2024 when the US Securities and Exchange Commission approved 11 exchange traded bitcoin funds, opening the door to cryptocurrencies for new institutional and retail investors. BlackRock, the world’s biggest asset manager, said last week it sees a “case for including bitcoin in multi-asset portfolios”.

NextGen Digital Venture, a $120mn crypto equity fund, is up 330 per cent from its launch in March 2023 to the end of November, according to investors. It has benefited from positions in some bitcoin ETFs, as well as cryptocurrency exchange platform Coinbase and software provider turned bitcoin investor MicroStrategy.

“After the bitcoin ETF was approved we felt that crypto stocks would become another opportunity for institutional investors because they already had access to bitcoin,” said Jason Huang, founding partner of NextGen Digital Venture.

Coinbase is up almost 60 per cent since the end of 2023, while MicroStrategy is up more than 400 per cent.

Some macro hedge funds — which trade macroeconomic trends in currencies, commodities, bonds and stocks — have also boosted exposure to digital assets in anticipation of a favourable market environment. MP Alpha Capital’s $20mn global macro hedge fund is up over 30 per cent this year, according to investors.

“We’ve had a good run on digital assets: bitcoin, ethereum and bitcoin miners,” said Miller, referring to firms that complete complex calculations in exchange for tokens. “Over the past 18 months, our whole thesis was around the institutional adoption of digital assets and the macro backdrop of looser monetary policy, a weaker dollar and a liquidity-rich environment.”

Trump has signalled that crypto regulation is among his most pressing priorities, and has named venture capitalist and Elon Musk confidant David Sacks as the White House’s cryptocurrency tsar.

A change in leadership at the SEC, the top American securities regulator, has also been welcomed by crypto enthusiasts.

Gary Gensler, the current chair who branded crypto a “wild west” rife with unlawfulness and investor risk, will step down when Trump takes office. He had refused to craft rules catered to digital assets, arguing that many tokens are securities and that existing securities law is enough guidance.

Gensler will be replaced by cryptocurrency advocate Paul Atkins.

Still, several managers warned that the surge in bitcoin should cause investors to pause and take stock. Huang at NextGen Digital Venture said that, while he is long-term bullish on bitcoin and crypto, “no asset rises in a straight line without volatility.”

BALTIMORE — Luigi Mangione, heir to a prominent Baltimore family, was reported missing by his mother weeks before United Healthcare CEO Brian Thompson was fatally shot.

On Thursday, he faced judges in both New York and Pennsylvania where his lawyers said they would fight the murder charges. 

Mother’s efforts to locate

In the months before the shooting, Mangione disappeared from family and friends. He did speak to a British-based journalist.

“He did allude to his frustrations with the U.S. health care system. There was a brief exchange we had where he said the U.S. healthcare system was really expensive,” Gurwinder Bhogal told CNN. 

Bhogal also said, “He did talk about corporate greed. He didn’t like corporate greed.”

Last month from Baltimore, Mangione’s mother reportedly alerted San Francisco police on November 18 her son was missing. San Francisco authorities then recognized Mangione after the shooting and told the FBI days before he was captured. 

Prominent Baltimore family

Mangione’s family has deep ties to the Baltimore area.

They own Lorien Health Services, a chain of nursing homes, as well as the Turf Valley and Hayfields Country Clubs and conservative news-talk radio station WCBM. 

The family has only made one statement since Mangione’s arrest.

His cousin Nino Mangione, a Republican state delegate representing Baltimore County, wrote, “Unfortunately, we cannot comment on news reports regarding Luigi Mangione. We only know what we have read in the media. Our family is shocked and devastated by Luigi’s arrest. We offer our prayers to the family of Brian Thompson and we ask people to pray for all involved. We are devastated by this news.”

The FBI reportedly relayed the tip to NYPD 

“The question becomes was there some sort of communication breakdown along the way? Did the NYPD take this seriously? What action did they take once they got this tip? So there are a lot of open questions,” Michael Barba, a reporter with the San Francisco Chronicle, said. 

An NYPD official said after the first photos of the suspect were released, Mangione’s mother told authorities she did not believe it was him. Authorities said his mother spoke to them the day before her son was arrested. She did not identify him in the surveillance photos that were being circulated, but she did tell them it might be something she could see him doing.

Baltimore acquaintances shocked 

Mangione was the valedictorian of the Class of 2016 at Baltimore’s elite Gilman School.

Classmate James Sandberg told WJZ he knew Mangione “somewhat well” and “he was a nice kid.” Mangione was the valedictorian of their class. A video of the 119th Gilman School Founder’s Day Ceremony shows Mangione’s speech.

Sandberg said he was “shocked” after someone shared an article about Luigi as a person of interest.

“Thought it was maybe a different Luigi Mangione,” Sandberg said.

The Gilman School said in a statement. “This is a deeply distressing news on top of an already awful situation. Our hearts go out to everyone affected.”

Mangione in court

Thursday morning, officers led Mangione into a courtroom in Hollidaysburg, Pennsylvania. The hearing lasted 90 minutes. 

Mangione spoke to his attorney and agreed to extradition as a row of officers with the NYPD waited to take him back to Manhattan to face charges in Thompson’s killing.

Reporters swarmed Mangione’s lawyer following the hearing. 

“Everything we did today was in his best interest. We’re ready now to move forward and start defending these charges in New York and Pennsylvania,” his Pennsylvania-based attorney Thomas Dickey said.

A clean-shaven Mangione looked briefly at the cameras before officers placed him in a black SUV.

A caravan of police vehicles then took him to the airport, where Mangione was escorted onto a plane, headed for New York. 

When he got to New York, Mangione was escorted to court by numerous, heavily armed officers.

He said little during his arraignment but calmly answered the judge’s questions that he was aware of his rights. 

At a news conference, District Attorney Alvin Bragg said Mangione intended to cause terror.

The NYPD said Mangione targeted Thompson and criticized the healthcare industry in handwritten notes recovered during his arrest. 

This week, prosecutors increased the charges to include first-degree murder and terrorism. 

WJZ has learned federal prosecutors have charged Mangione with four counts—including murder, stalking and firearms offenses. The federal complaint includes surveillance images detailing Mangione’s whereabouts the day of the murder. 

Mangione’s lawyer, former prosecutor Karen Friedman Agnifilo, declined to comment. 

She wrote in a prior statement, “The federal government’s reported decision to pile on top of an already overcharged first-degree murder and state terror case is highly unusual and raises serious constitutional and statutory double jeopardy concerns. We are ready to fight these charges in whatever court they are brought.”

The prosecutor in Pennsylvania said he will not be dropping charges there. 

“They are allegations at this point, but we are not in the practice of just dismissing charges simply because someone has more serious charges somewhere,” Blair County District Attorney Peter Weeks said Thursday. 

Mangione has a preliminary hearing on January 18.

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US long-term bond yields climbed higher again on Thursday, a day after Federal Reserve officials said they expected to cut interest rates much more slowly next year than previously anticipated.

The yield on the benchmark 10-year Treasury, which moves inversely to its price, rose as much as 0.09 percentage points to 4.59 per cent, its highest level in more than six months, after jumping on Wednesday.

The dollar gained a further 0.3 per cent against a basket of peers on Thursday, after soaring to the highest level since November 2022 in the previous session.

The Fed on Wednesday reduced interest rates by a quarter-point but unsettled investors after officials raised their 2025 inflation forecasts and cut back their projections for further rate cuts. It was the central bank’s final meeting before Donald Trump takes office next month.

Concerns about inflation stalling above 2 per cent contributed to Fed officials forecasting just half a percentage point worth of cuts in 2025, down from a full percentage point in their previous projections in September.

“I think the market had anticipated that the Fed would cut rates, but would also continue to give itself optionality for additional cuts for next year,” said Akshay Singal, global head of short-term interest rate trading at Citigroup.

Instead the US central bank had significantly shifted and had given itself more of an option “to keep rates on hold for a period of time” to absorb any impact from looser fiscal policy, he added, predicting the hawkish rhetoric would continue to boost the dollar.

Investors now see a roughly 85 per cent chance that the Fed either refrains from a rate reduction, or cuts rates once or twice next year, according to CME Group data based on federal funds futures.

The S&P 500 was 0.4 per cent higher in afternoon trading on Wall Street, well below earlier levels that had pushed it up more than 1 per cent. The US’s main equities barometer slid nearly 3 per cent on Wednesday, in its biggest fall since August.

The tech-heavy Nasdaq Composite gained 0.3 per cent after dropping 3.6 per cent on Wednesday. Six of the Magnificent Seven tech behemoths — Apple, Microsoft, Alphabet, Amazon, Meta and Nvidia — advanced. However, Tesla, which has been boosted in part by co-founder Elon Musk’s warm relations with president-elect Trump, slipped 2 per cent after sinking 8 per cent in the previous session.

“We’ve been so focused on Trump [in recent weeks] but right now it seems to almost be back to a Jay Powell type stock market,” said Jeff Weniger, head of equity strategy at WisdomTree, referring to the chair of the Fed.

The Fed’s hawkish outlook ricocheted into markets in Europe and Asia on Thursday. Europe’s benchmark Stoxx 600 dropped 1.5 per cent and the UK’s FTSE 100 fell 1.1 per cent. Earlier, markets in India, Japan, South Korea and Hong Kong also closed in the red.

Emerging market stocks were also hit, with MSCI’s broad EM index sliding 1.2 per cent.