- Willy Woo, an on-chain analyst, said on Wednesday that hedge funds outperformed retail investors between 2023 and 2025.
- He explained that funds generated returns through staking, interest rate differentials, and token discounts, while similar structures later spread across crypto.
- Another analyst, Simon Dixon, criticized the FTX bankruptcy process, arguing it benefited a small group of financial participants.
On-chain analyst Willy Woo said on Wednesday that hedge funds outperformed retail crypto investors between 2023 and 2025 by capitalizing on structured token deals, and urged investors to buy Bitcoin (BTC) instead.
Woo, famous for his Bitcoin-focused on-chain analysis, explained that the dynamic began after the collapse of crypto exchange FTX in 2022, when the platform filed for bankruptcy following a liquidity crisis tied to the misuse of customer funds.
Responding to Woo’s post, Simon Dixon, CEO of investment platform BnkToTheFuture, said the FTX Chapter 11 process resulted in a transfer of value to a small group of financial participants, based on his experience as a creditor. Chapter 11 is a form of bankruptcy protection that allows a company to restructure its debts while continuing to operate.
The Trade That Retail Could Not Replicate
Woo highlighted that funds basically paired discounted token purchases with hedges betting on price declines, and effectively reducing the risk.
Bankruptcy managers sold assets, including locked Solana (SOL) tokens, at discounts of more than 60% to account for lock-up periods and price exposure.
Hedge funds paired these purchases with bets that the token's price would fall, allowing them to protect against price risk while earning returns from multiple sources, including staking rewards, interest rate differentials, and the original discount on the token purchase. “Not that I recommend buying crypto, you need to be an insider to get an edge, it works like a casino, the house will take your money,” Woo told investors. “Just buy BTC and get on with your life.”
Why Altcoins Stayed Under Pressure
The analyst added that similar structures later spread across crypto, with project backers selling locked-token allocations over the counter while managing exposure through derivatives. He said this created persistent selling pressure across altcoins, contributing to weaker performance relative to Bitcoin.
Solana was trading at $92, up over 3% in the last 24 hours. On Stockwits, retail sentiment around SOL remained in ‘bearish’ territory, with chatter around it in ‘normal’ levels over the past day.
Bitcoin was trading at $71,620, up by 1.3% over 24 hours. On Stocktwits, the retail sentiment around Bitcoin remained in the ‘bearish’ territory, as chatter levels around it remained ‘low’ over the past day.
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