Traditional hedge funds now make up one-third of investors in digital assets | Paragon Alpha

Traditional hedge funds now make up one-third of investors in digital assets

By Matea Gucec

According to a Business Review survey, the proportion of traditional hedge funds investing in digital assets has increased from one-third to practically double in just one year. The study references the Alternative Investment Management Association (AIMA) and Elwood Asset Management-produced PwC's 4th Annual Global Crypto Hedge Fund Report 2022, which shows that 38% of the traditional hedge funds polled are currently investing in digital assets, up from 21% a year ago.

Additionally, it is anticipated that around 300 specialized crypto hedge funds are currently functioning on a global scale, with the pace of new funds being launched having sped up over the previous two years. The total assets managed (AuM) by cryptocurrency hedge funds have increased by 8% over the past year and are currently worth USD 4.1 billion.

The majority of the traditional hedge funds polled have little exposure to digital assets, with 57% stating that less than 1% of their total AUM is invested in them. However, 20% of AUM is made up of digital assets, and 67% plan to grow their exposure by the end of the year.

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