Future

Bitcoin

Hedge

James

A new <a href="https://www.bloomberg.com/news/articles/2024-10-10/almost-half-of-traditional-hedge-funds-are-dabbling-in-crypto" rel="noopener noreferrer nofollow">survey</a> reveals that nearly half of hedge funds traditionally focused on assets like stocks and bonds have now ventured into the cryptocurrency space. According to the Global Crypto Hedge Fund Report, published on Thursday by the Alternative Investment Management Association (AIMA) and PwC, 47% of hedge funds reported exposure to digital assets in 2024.
This marks a notable rise from 29% in 2023 and 37% in 2022, highlighting growing confidence in the market.
The survey found that of the <a href="https://thecoinrise.com/billionaire-hedge-fund-manager-says-crypto-is-here-to-stay/" rel="noopener noreferrer nofollow">hedge funds already investing in crypto</a>, 67% plan to maintain their current capital allocation, while others are gearing up to increase investments by the end of this year. This trend is being driven by regulatory clarity and the recent launch of <a href="https://thecoinrise.com/ether-to-outperform-bitcoin-post-eth-etf-approval/" rel="noopener noreferrer nofollow">cryptocurrency exchange-traded funds (ETFs) in the U.S.</a> and Asia, which have drawn even more investors to this asset class.
<h2 id="span-style-font-weight-400-evolving-investment-strategies-span">Evolving Investment Strategies</h2>
Hedge funds have started moving beyond simple spot trading of cryptocurrencies. In 2024, 58% of these funds reported trading crypto derivatives, up from 38% in the previous year. Conversely, spot market trading, which had reached a high of 69% in 2023, has dropped to just 25% this year. This shift towards more sophisticated strategies shows the growing maturity of hedge funds’ approach to crypto.
James Delaney, managing director of asset management regulation at AIMA, stated, “<a href="https://thecoinrise.com/senator-cynthia-lummis-slams-sec-calls-for-regulatory-overhaul/" rel="noopener noreferrer nofollow">Regulatory clarity has played</a> a crucial role in boosting confidence among investors.” With cryptocurrency’s volatile nature providing potentially higher returns than traditional markets, funds willing to embrace the asset class are seeing attractive opportunities.
<h2 id="span-style-font-weight-400-hurdles-and-future-outlook-span">Hurdles and Future Outlook</h2>
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. While crypto offers promising returns, particularly in arbitrage and distressed debt, it remains a divisive asset class for many established investors.
The post <a href="https://thecoinrise.com/nearly-50-of-traditional-hedge-funds-now-invest-in-crypto/" rel="noopener noreferrer nofollow">Nearly 50% of Traditional Hedge Funds Now Invest in Crypto</a> appeared first on <a href="https://thecoinrise.com/" rel="noopener noreferrer nofollow">TheCoinrise.com</a>.

Nearly 50% of Traditional Hedge Funds Now Invest in Crypto

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