Everyone figured crypto hedge funds would be printing money right now. ETFs approved, Bitcoin soaring past 100k — perfect setup for momentum chasers to rake it in. But nope. Zaheer Ebtikar, founder of Split Capital, just pulled the plug on his fund. Profitable? Check. Over 100% returns in 2024 and 2025? Yup. Top performer? He says so himself. Yet he’s out, joining Peter Thiel-backed stablecoin outfit Plasma as chief strategy officer.
This flips the script hard. It screams that crypto’s wild trading days — the PvP button-mashing Ebtikar calls it — are over. Hedge funds built for volatility? Useless in a market chasing ‘the future,’ whatever that means.
“The hedge fund model did not make sense for crypto, in perpetuity,” he said.
Spot on, maybe. But let’s not kid ourselves. Crypto’s always been a casino dressed as finance. Ebtikar’s exit? Just the latest dealer folding his table.
Why Ditch a Winning Fund?
Look, Split Capital wasn’t some loser outfit bleeding out in the 2022 crash aftermath. Ebtikar brags — fairly — about crushing benchmarks. But he argues the industry’s matured. No more rewarding ‘traders chasing momentum.’ Now it’s about vision, value, betting on founders.
His conviction narrowed, he says, to a handful of bets. Plasma topped the list after cozying up to their team in 2024 and 2025. Fair enough. Crypto hedge funds have been under the gun since the downturn. Redemptions, tougher conditions — we’ve seen funds shutter before.
But here’s my unique take, one you won’t find in the press release glow: this echoes the 2018 ICO hangover. Back then, funds pivoted from token flips to DeFi yield farming. Same pattern — hype cycle pops, survivors rebrand as ‘builders.’ Ebtikar’s move? Predicts a regulatory buzzsaw for stablecoins ahead. Tether’s dodged bullets for years; Plasma’s ‘global financial access’ pitch smells like the same overpromise. Thiel’s involved — guy loves contrarian bets, but who foots the bill when Uncle Sam cracks down?
Ebtikar admits critics were right to doubt sustainability. Bold. Most founders double down on denial.
“The industry no longer rewards traders chasing momentum, it has matured into a space where the only real question is ‘What does the future look like and where is the value?’”
Matured? Please. Crypto’s graduating from slot machines to poker tables — still gambling, just slower.
Plasma: Stablecoin Savior or Next Hype Machine?
Plasma raised 24 million last February from Framework Ventures, Bitfinex, Thiel, even Tether’s Paolo Ardoino. Ambitious: infrastructure for stablecoin settlement, global access. Ebtikar’s role? Partnerships, growth, GTM, schmoozing investors and pols for Plasma One rollout.
Sounds noble. Less speculation, more building systems. But who’s actually making money here? Not retail Joes wiring remittances — fees go to VCs first. Thiel cashes out on Founders Fund wins; Ardoino protects Tether turf. Ebtikar? Trades fund fees for equity upside, classic Valley shuffle.
Stablecoins matter — Standard Chartered’s yelling about faster turnover curbing demand, but that’s banker talk. Real question: does Plasma fix what’s broken, or just slap ‘infrastructure’ on yield-chasing rails?
Is the Hedge Fund Era Really Dead in Crypto?
Short answer: yeah, probably. Ebtikar’s not alone. Pressures mounting since ‘22. Momentum plays? Fickle. Narratives flip overnight — remember NFTs? DeFi summer?
Funds like Split narrowed to ‘believed-in’ verticals. Smart survival tactic. But perpetuity? Crypto laughs at forever. Bull run could’ve extended the party; instead, maturation (or fatigue) hits.
Ebtikar’s framing it poetic: last dance of old era, golden age ahead with Plasma. Cynic that I am — 20 years watching Valley unicorns turn to ash — I’ll bet on headaches. Stablecoins face MiCA in Europe, potential U.S. rules post-election. Plasma’s global push? Regulators worldwide sharpening knives.
And the money trail. Hedge funds extracted billions in fees during booms. Now? Builders promise utility, but VCs pocket the raises. Same game, shinier wrapper.
Split’s wind-down stings less knowing returns were fat. Investors got paid. Ebtikar’s free to chase his ‘small number of founders.’ Risky, but he’s betting his career.
Who Wins in Crypto’s ‘New Phase’?
Not traders. Not most funds. Winners? Infrastructure plays with deep pockets. Plasma fits — Thiel money buys time. But execution’s everything. Roll out Plasma One, expand ecosystem — or flop like so many ‘settlement layers.’
Ebtikar’s all-in: hope for golden age. Me? Skeptical. Crypto’s shifted, sure. From button-clicking to boardrooms. But value? Still speculative. Stablecoins settle trillions now — USDT, USDC dominate. Plasma crashes the party how?
My bold prediction: if regs tighten, Plasma thrives as compliant alternative. Thiel’s radar sniffs that. Otherwise, another funder’s folly.
This move changes little for normies. Crypto presses on, hype eternal. But for insiders? Signal. Pivot or perish.
🧬 Related Insights
- Read more: Schwab: 1% Crypto Can Hijack Portfolio Risk
- Read more: Nium’s Stablecoin Card Play: How $200 Billion in Digital Dollars Finally Gets Spent
Frequently Asked Questions
What happened to Split Capital?
Zaheer Ebtikar shut it down despite strong returns, saying hedge funds don’t fit crypto anymore. He’s joining Plasma.
Who is Plasma and what do they do?
Peter Thiel-backed startup building stablecoin settlement infrastructure for global finance. Raised $24M from big names like Tether’s CEO.
Is this the end of crypto hedge funds?
Likely for many — market’s maturing beyond momentum trading, per Ebtikar. Survivors bet on builders.
