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A new survey reveals a significant shift in hedge fund investments towards cryptocurrencies, with nearly half of traditional asset-focused funds now engaged in the digital asset class. This uptake, according to the Global Crypto Hedge Fund Report by the Alternative Investment Management Association and PwC, marks an increase from 29% in 2023 to 47% in 2024. Enhanced regulatory clarity and the introduction of exchange-traded funds (ETFs) in the U.S. and Asia have bolstered investor confidence, leading to a more diverse application of trading strategies, including a rise in derivative trading among these funds.
The report highlights a strategic evolution within hedge funds; 58% are now trading crypto derivatives, a significant jump from last year’s 38%. The decrease in direct token trading from 69% to 25% this year illustrates a shift towards more sophisticated investment methods. With crypto markets known for their volatility, hedge funds are capitalizing on the higher potential returns offered by these less efficient markets.
Despite a broadening interest, some hedge funds remain cautious, with 76% of non-investors likely to stay away over the next three years. However, for those invested, a robust 67% intend to maintain or increase their stakes in crypto, suggesting a strong, ongoing commitment to the asset class among leading financial players.
