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Survey Shows One Third of Hedge Funds are Already Investing in Digital Assets
Summary: The recent bear market has seemingly not put a damper on hedge funds' steady increase in involvement in crypto. A 54-page report published by PwC showed that of the funds surveyed that do hold crypto, 33% have allocated "greater than 1% of AuM." Furthermore, according to the same PwC report, 67% of fund managers that ...
The recent bear market has seemingly not put a damper on hedge funds' steady increase in involvement in crypto. A 54-page report published by PwC showed that of the funds surveyed that do hold crypto, 33% have allocated "greater than 1% of AuM."
Furthermore, according to the same PwC report, 67% of fund managers that do hold digital assets on their balance sheet "intend to deploy more capital by the end of 2022," and "29% of managers who are not yet investing in Digital assets plan to." Of the survey respondents who did not invest in digital assets, "83% of respondents who did not invest in Digital assets cited regulatory uncertainty as their rationale." This is a good sign for retail investors that the overwhelming majority of funds not already involved would be interested with proper regulation.
The report also surveyed Crypto-specific funds, which also had some positive insights into Defi's institutional sector growth. The percentage of crypto hedge funds with over $20 million in assets increased from 46% to 59% in 2021. This is significant because $20m is the threshold for "critical mass" in the traditional hedge fund sector, according to the same report.
Of the Crypto specific funds, 41.6% of crypto hedge funds utilized Defi platforms to enhance yield through farming and borrowing or lending of assets. This increase shows more trust in Defi platforms, which often can be an area of concern given the lack of regulation. The survey also indicates that PwC registers "over 300 crypto hedge funds currently," and "our survey suggests half of these were launched in the past 3 years."
On the regulation side, "82% of funds make use of an independent custodian" for transactions, and "91% of funds have an independent auditor."
This is great news for crypto investors, as it shows professionals are more than comfortable getting their feet wet and warming up to the idea of the rise of a new asset class.
Author:Garrett Meifert
Tags: DeFi,hedge fund,Institutional Adoption
Link: Survey Shows One Third of Hedge Funds are Already Investing in Digital Assets [Copy]
