Conventional hedge funds are slowly embracing cryptocurrency investments however are preserving their publicity restricted because the market continues to mature, in line with new analysis from PricewaterhouseCoopers, or PwC.
In its 4th Annual World Crypto Hedge Fund Report 2022, PwC said roughly one-third of conventional hedge funds surveyed are already investing in digital belongings corresponding to Bitcoin (BTC). So-called “multi-strategy” hedge funds have been most certainly to take a position, adopted by macro technique and fairness technique corporations, respectively.
Of the hedge funds at present invested within the crypto area, 57% have allotted lower than 1% of their whole belongings beneath administration. Two-thirds of the corporations at present invested plan to extend their publicity by the top of 2022.
Respondents cited “regulatory and tax uncertainty” as the one biggest barrier to investing. Particularly, hedge funds are involved a few fragmented regulatory setting globally in addition to unclear steerage on how the asset class will probably be ruled.
A complete of 89 hedge funds have been included within the survey, which was carried out through the first quarter of 2022.
Hedge funds and different conventional asset managers have been eyeing developments within the crypto sector to gauge whether or not they need to start investing within the area. Whereas a number of hedge funds have launched crypto divisions and started investing in the space, the vast majority of corporations stay on the sidelines. Curiously, a 2021 survey of 100 world hedge funds revealed that managers anticipate to allocate an average of 10.6% to crypto inside 5 years.
Though crypto belongings have been in a protracted bear marketplace for a lot of 2022, institutional traders seem like shopping for the latest worth dip. Inflows into Bitcoin funding merchandise, corresponding to exchange-traded funds and Grayscale’s GBTC product, increased by $126 million last week, in line with CoinShares. Bitcoin funding funds have quietly added over $500 million in web inflows this 12 months.