A recent report published by AIMA, the 4th AIMA Annual Global Crypto Hedge Fund Report 2022, highlighted the continued growth in the AUM being allocated to this asset class during 2021.
Even with 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.
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Crypto gains favour with hedge funds new and old
Crypto hedge funds’ assets under management (AuM) almost doubled during 2020 and are set to increase further this year with a number of firms predicting that the price of bitcoin will break the $100,000 (€81,710) mark before the end of the year.
Through the course of 2020, crypto hedge funds’ AuM increased from from $2 billion to $3.8 billion, according to the Global Crypto Hedge Fund Report 2021 jointly published by PwC, Elwood Asset Management and the Alternative Investment Management Association.
The study also found that traditional hedge funds became more interested in cryptocurrencies during 2020.
Almost a fifth (21%) of the surveyed non-crypto hedge funds are invested in the asset class with the average allocation recorded as 3% of portfolios. Furthermore, 86% of those firms plan to increase their allocation before the end of the year.