New York, Wednesday, October 16, 2024 – A new survey by Bloomberg reveals that 47% of traditional hedge funds now have exposure to cryptocurrencies, marking a significant increase from 29% in 2023.
The survey, conducted by the Alternative Investment Management Association (AIMA) and PwC, attributes this growth to improved regulatory clarity and the introduction of exchange-traded funds (ETFs) in the U.S. and Asia.
Among hedge funds already invested in digital assets, 67% plan to maintain their crypto exposure, while the rest intend to increase their investments by the end of 2024. These funds are shifting towards more complex strategies, with 58% of them trading crypto derivatives in 2024, up from 38% in 2023. However, those trading in spot markets dropped to 25%, from a peak of 69% last year.
James Delaney, managing director of asset management regulation at AIMA, noted a steady recovery in confidence, driven by regulatory clarity. Edward Chin of Parataxis Capital Management highlighted the potential for higher returns in crypto compared to traditional markets, though he pointed out challenges in deploying large amounts of capital in this smaller market.
While many hedge funds are embracing cryptocurrencies, 76% of those not yet invested in the asset class do not plan to change their stance within the next three years. Exclusion from investment mandates remains a significant barrier.
Of the 100 hedge funds surveyed, 42% were focused on traditional assets, while the remainder specialized in crypto.
