Although bitcoin (BTC) pulled back in price slightly heading into the weekend, floating around $8,300, the past several weeks have nonetheless been significant ones for cryptocurrencies. A recent pullback was not enough to quell expectations that BTC would reach the $10,000 hurdle once again, and analysts could point to the month of April as a sign that the digital currency space is potentially headed for even more significant gains. According to a report by MarketWatch, cryptocurrency-based hedge funds gained more than 80% for that month alone. This marks the single largest gain for the cryptocurrency hedge fund world in more than four years.

Monthly Performance of 83.86%

According to Eurekahedge, a research firm focusing on hedge funds, the company's Crypto-Currency Hedge Fund Index saw gains of 83.86% for the month of April. This was following three months of losses; January saw declines of 6.04%, February dropped by 13.21%, and March fared worst of all, with losses of 34.11%.

What's more, the April performance for the index, which tracks the growing field of hedge funds dedicated to cryptocurrencies and digital currency investments of various kinds, was the strongest since November of 2013. At that point, the fifth month that the index was in existence, cryptocurrencies burst into the public eye, gaining 405.30% in a period of just a few weeks. The largest yearly gains were for 2017, when the index posted more than 1,700% growth over 12 months.

Strength of Bitcoin Alternatives Prompts Growth

Bitcoin has been showing signs of resurgence for several weeks, but it may be other cryptocurrencies that have prompted the sudden turnaround for Eurekahedge's index. For example, ethereum, which is the second largest digital currency by market cap, climbed by almost 70% in April. Bitcoin Cash, on the other hand, more than doubled in value during that same period.

Granted, the world of hedge funds dedicated to cryptocurrencies is relatively small at this point; Eurekahedge's index charts just seven constituent funds at this point. Nonetheless, if digital currencies continue to dominate going forward, it's likely that the hedge fund world will also show more interest in this trendy space.

Investing in cryptocurrencies and Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns bitcoin and ripple.