Nearly 50% of traditional hedge funds have crypto exposure: PwC

Nearly half of hedge funds focused on traditional assets now have crypto exposure due to regulatory clarity and the launch of ETFs, according to a new survey.

A growing number of hedge funds focused on traditional asset classes are embracing crypto, a move driven by increased regulatory clarity and the launch of exchange-traded funds in the U.S. and Asia, Bloomberg reported, citing a new survey by the Alternative Investment Management Association. PricewaterhouseCoopers.

The report found that 47% of hedge funds traded in traditional markets now have exposure to cryptocurrencies; this rate was 29% in 2023 and 37% in 2022. 67% of these funds plan to maintain current investment levels in cryptocurrencies. the rest plan to increase their exposure by the end of 2024.

Initially, many hedge funds turned to crypto by trading tokens on the spot market. However, the report points to a shift towards more complex trading strategies, with 58% of funds involved in crypto trading derivatives by 2024; This rate was 38% compared to the previous year. At the same time, the proportion of those trading funds in spot markets fell to 25% from last year’s peak of 69%.

Despite the growing interest, some hedge fund managers still remain hesitant as the survey finds that 76% of those not currently invested in crypto are unlikely to change their stance in the next three years; This is an increase from 54% in 2023.

Additionally, two-thirds of traditional hedge funds do not plan to integrate Bitcoin ETFs into their existing crypto-focused strategies. The survey, which included 100 hedge funds, 42 percent of which focused on traditional assets and the rest on crypto, was conducted in the second quarter.