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Alternative Market Briefing

Hedge funds double investments in crypto assets

Wednesday, June 08, 2022

Laxman Pai, Opalesque Asia:

Despite the tremendous volatility in the sector, there are many more traditional hedge funds investing in crypto and more specialist crypto funds being created as the digital asset class gains acceptance, said a survey.

Of traditional hedge funds surveyed, 38% are currently investing in digital assets, compared to 21% a year ago. Meanwhile, the number of specialist crypto hedge funds is estimated to now top 300 globally, with the pace of new funds being created accelerating in the past two years.

Total assets under management (AuM) of crypto hedge funds surveyed was US$4.1bn in 2021, up 8% from the year prior. These are findings from PwC's 4th Annual Global Crypto Hedge Fund Report 2022, produced together with the Alternative Investment Management Association (AIMA) and CoinShares.

Most traditional hedge funds getting into digital assets are still just dipping their toes - 57% have less than 1% of total AuM in digital assets, revealed the survey. But it is notable that for 20% of these funds, digital assets represent between 5% and 50% of AuM.

Further, two-thirds of funds (67%) currently investing in digital assets intend to deploy more capital into the asset class by the end of 2022.

For specialist crypto hedge funds surveyed, the average AuM more than doubled to US$58.6mn from US$23.4mn in the previous year, while the median AuM nearly tripled to US$24.5mn from US$8.5mn. From 2020 to 2021, the percentage of crypto hedge......................

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