Nearly a third of hedge fund managers plan to invest in cryptocurrencies, report finds
Nearly a third of hedge fund managers plan to invest in cryptocurrencies as the traditional financial sector increasingly merges with cutting-edge financial technology.
What happened
A recent study by “Big Four” auditing firm Ernst & Young revealed that 31% of hedge fund managers, 24% of alternative investors and 13% of private equity managers plan to add cryptocurrencies to their portfolios within the next two years. Declassified report on Monday. The study surveyed 264 alternative institutional investors who collectively manage nearly $5 trillion.
Alternative investment hedge funds invest their capital in anything other than stocks, bonds or cash, including precious metals, art and real estate, but also potentially rare basketball or playing cards.
Still, only 7% of these funds already have crypto or related assets in their portfolios. Among funds exposed to digital assets, direct holding of cryptocurrencies, derivatives (futures or options), and funding to private blockchain companies are the most popular ways to enter the industry.
Of the managers who responded, 78% said their funds did not invest in cryptocurrencies because they did not fit their strategy. Other important reasons why they do not invest in the industry include volatility, regulatory uncertainty and a lack of understanding of the asset class.
