A recent report by 10x Research reveals a concerning trend in crypto hedge funds, as many struggle to keep up with the rapid growth of Bitcoin. Since the end of 2017, Bitcoin has surged over 565%, but average returns for typical crypto hedge funds have lagged behind, with the gap widening significantly. The top 100 crypto hedge funds show a stark performance disparity, posting an average return rate of only 272%, lagging behind by a staggering 293% — even surpassing their overall total returns. This raises concerns about the effectiveness of their diversification strategies and risk management abilities due to their high monthly return correlation of 89%. While altcoin investment has failed to generate market excitement, funding rate arbitrage and volatility-based strategies are collapsing. Despite these challenges, most funds continue relying on outdated strategies, struggling to adapt to changing market dynamics. A real advantage lies in adopting more effective tactics like trend trading and breaking away from traditional approaches. Meanwhile, retail investors are increasingly turning to Bitcoin ETFs instead of high-beta hedge funds, highlighting the pressing need for transformation within the fund industry.