Research by PwC shows that traditional fund managers are slowly starting to embrace cryptocurrency investing. However, as the market continues to mature, they remain somewhat hesitant.
Hedge funds are scared
About a third of Crypto 2022 hedge funds are already investing in cryptocurrencies like bitcoin (BTC). The report highlights that so-called “multi-strategy” hedge funds are the ones most likely to be tempted by cryptocurrencies very quickly. Then there are macro strategy and equity strategy firms.
In its report, PwC also informs that 57% of hedge funds currently investing in cryptocurrencies have already allocated less than 1% of their funds to assets under management. At the same time, two-thirds of companies that have already invested in the same assets plan to increase their exposure by the end of 2022.
A general reluctance
Even though investing in digital assets is becoming a mainstream trend, there is still some reluctance. Indeed, investors have mentioned “ regulatory and tax uncertainty as a big obstacle to their success. Hedge funds are concerned that there is no global regulation in the field of cryptocurrencies. Moreover, there is a lack of transparency in the political orientations on this subject.
Over the course of 2022, a large portion of digital assets have found themselves in an extended downtrend. Nevertheless, the majority of institutional investors have decided to invest. They take advantage of the crisis to optimize their placement. Coinshares notes that inflows into Bitcoin investment products, such as exchange-traded funds and Grayscale’s GBTC product, have increased by $126 million last week.
The cryptocurrency market is very attractive to hedge funds as more and more of them want to turn to this sector. They are investing a lot of funds in digital assets, which suggests that the trend will continue for a long time yet.
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