Binance Research: Institutional Funds Flowing into Passive Products, Active Management Lacks Intermediate Layer

On November 11, Binance Research reported that institutional funds are pouring into the cryptocurrency market, primarily flowing into passive Beta products (such as ETFs), while active management strategies have failed to keep pace. The reason lies in the lack of an intermediate layer that connects funds with managers for "discovery and verification." The funding sources for crypto active strategies heavily rely on personal networks and meetings, lacking standardized performance verification and benchmark systems. Research shows that 80% of asset allocators prioritize asset safety over historical returns, and verified trading platform data can significantly enhance due diligence. Managers believe that unverifiable performance and lengthy compliance reviews are barriers to fundraising. Capital Connect data indicates that directional strategies account for 44.3% of the total number of funds but hold only 6.7% of the capital; meanwhile, market-neutral, statistical arbitrage, and traditional multi-strategy funds have absorbed 92.1% of the capital. The average single investment size for institutions in neutral strategies is about 11 times that of directional strategies. In October, BTC fell by 7.2%, with directional funds averaging a return of +1.9% and neutral strategies at +1.0%, demonstrating the resilience of active strategies under pressure. Binance Research concludes that institutional preferences and the introduction of traditional structures are driving market maturity, but allocators remain highly selective, requiring a comprehensive verification system and operational infrastructure to unlock the inflow of active management funds.

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