More Than Half of Traditional Hedge Funds Now Hold Crypto Assets
The post More Than Half of Traditional Hedge Funds Now Hold Crypto Assets appeared on BitcoinEthereumNews.com.
According to the Alternative Investment Management Association (AIMA) and PwC’s 7th Annual Global Crypto Hedge Fund Report, 55% of traditional hedge funds now have exposure to digital assets, up from 47% in 2024. The survey included 122 hedge fund managers controlling $982 billion in assets. This represents a 17% year-over-year increase in funds holding crypto investments, marking a significant shift in how mainstream finance views digital assets. Small Allocations but Big Plans While more than half of hedge funds now hold crypto, most are taking a careful approach. Over half of these funds invest less than 2% of their total assets in digital assets. On average, funds allocate about 7% to crypto-related investments. However, the future looks different. 71% of hedge funds with crypto exposure plan to increase their investments over the next 12 months. This suggests growing confidence in digital assets despite conservative current positions. The main reasons funds invest in crypto are portfolio diversification (47%), market-neutral alpha opportunities (27%), and asymmetric return potential (13%). How Hedge Funds Access Crypto Markets Most traditional hedge funds prefer using derivatives to gain crypto exposure. 67% of funds invest through crypto derivatives rather than buying digital assets directly. This approach jumped from 58% in 2024. Derivatives allow hedge funds to take positions without holding the actual cryptocurrencies. They offer leverage and sophisticated hedging strategies. However, the October 2025 flash crash exposed risks with this approach, triggering over $19 billion in liquidations. Source: AIMA research paper Spot crypto trading also grew significantly, rising from 25% to 40%. Other popular methods include exchange-traded products (33%), tokenized assets (27%), and crypto-related equities (27%). US Regulations Drive Institutional Confidence New regulations in the United States are encouraging more hedge funds to enter the crypto market. 47% of institutional investors say evolving US policies are prompting them…
Filed under: News - @ November 8, 2025 6:29 am