Hedge funds are confident in the value proposition and the long-term resilience of digital assets. The PwC researchers, in collaboration with the Alternative Investment Management Association and CoinShares, arrived at these conclusions.
This sentiment was not affected by a reduction in 2023 of the share of structures investing in cryptocurrencies, from 37% to 29%.
93% of respondents expect the market capitalization of digital assets to rise by year-end.
«Most respondents achieved positive alpha, which underscores the important role these firms play in the ecosystem», — said Alexander Schmidt, head of index funds at CoinShares.
On average, the sector accounted for between 4% and 7% AUM of funds.
Just over half of traditional funds surveyed said they were not prepared to invest in cryptocurrencies over the next three years.
According to the study, hedge funds with open positions in the sector plan either to maintain or increase their holdings, despite market volatility and regulatory uncertainty.
According to John Garvey, head of financial services at PwC in the United States, the factors cited have constrained investments for more than half of respondents.
23% of traditional hedge funds are revising their strategy in the sector due to an unfavourable regulatory environment in the United States; 12% of crypto hedge funds are considering relocating outside the country.
As a key opportunity, 31% of traditional structures consider tokenization. A quarter of those who avoid investing in cryptocurrencies are actively studying this avenue.
In November 2022, the crypto venture firm LeadBlock Partnersraised $150 million for its second fund. Through the first such vehicle, the firm backed Yuga Labs,Bitpanda and BlockFi.
In April 2023, China Pacific Insurance Group of China, through its subsidiary launched in Hong Kong two investment funds focused on the digital assets industry.