A recent survey reveals that nearly half of hedge funds traditionally focused on stocks and bonds have now turned to cryptocurrencies. This significant rise in funds allocating to digital assets indicates growing confidence in the market.

Increasing Interest in Crypto Assets

According to the Global Crypto Hedge Fund Report, published by the Alternative Investment Management Association (AIMA) and PwC, 47% of hedge funds reported having exposure to digital assets in 2024. This is an increase from 29% in 2023 and 37% in 2022.

Evolving Investment Strategies

Hedge funds have begun to move beyond simple spot trading of cryptocurrencies. In 2024, 58% of these funds reported trading crypto derivatives, up from 38% the previous year. Spot market trading, which peaked at 69% in 2023, has dropped to just 25% this year. This shift towards more sophisticated strategies demonstrates the growing maturity of hedge funds’ approach to crypto.

Hurdles and Future Outlook

Despite the increased interest, not all hedge fund managers are on board. The survey showed that 76% of funds not currently investing in crypto are unlikely to change their stance in the next three years. Many cite the exclusion of digital assets from their investment mandates as a key reason. Moreover, two-thirds of traditional hedge funds do not plan to integrate Bitcoin ETFs into their strategies.

Cryptocurrencies are gradually capturing the attention of traditional hedge funds, though they remain a divisive asset class among many investors. Despite regulatory challenges, some funds see potential opportunities for high returns in cryptocurrencies.