United

when

Hedge

James

Increasing regulatory clarity around spot Bitcoin and Ether exchange-traded funds (ETFs) in the United States and Asia has encouraged almost half of traditional hedge funds to obtain exposure to digital assets.
A survey conducted by the Alternative Investment Management Association and PwC revealed that 47% of hedge fund managers trading in traditional markets have exposure to cryptocurrencies, <a data-ct-non-breakable="null" href="https://www.bnnbloomberg.ca/business/company-news/2024/10/10/almost-half-of-traditional-hedge-funds-are-dabbling-in-crypto/#:~:text=Among%20hedge%20funds%20trading%20in,Investment%20Management%20Association%20and%20PwC." rel="null" target="null" text="null" title="null">according</a> to a Bloomberg report.
Crypto exposure was 29% in 2023, while about 37% of the 100 hedge fund survey respondents said they had exposure to crypto in 2022.
<h2 id="regulatory-clarity-promotes-crypto-adoption">Regulatory clarity promotes crypto adoption</h2>
James Delaney, managing director of asset management regulation at AIMA, said global regulatory clarity was “boosting confidence” of hedge funds in crypto:
<blockquote>
 “The findings from this year’s report indicate a steady recovery in confidence over the past year.”
</blockquote>
Additionally, all traditional hedge funds currently involved with crypto plan to maintain or expand their positions. While 67% plan to keep their crypto investments steady, the remaining 33% expect to increase their exposure in the near future. 
Hedge funds used various strategies to gain exposure to crypto. According to the report, 58% traded derivatives, while 25% traded tokens in the spot market. Although derivatives have increased, spot market trading dropped by more than 50% compared to 2023.
Edward Chin, co-founder of Parataxis Capital Management, an investment firm focused on digital assets, highlighted the possibility of generating significantly higher returns in comparison to traditional asset markets:
<blockquote>
 “The application of traditional investment strategies can generate much higher returns in crypto given the market is less efficient.”
</blockquote>
Still, 76% of hedge fund managers with no crypto exposure said they are unlikely to adopt digital assets in the next three years. 
<h2 id="some-traditional-hedge-funds-stick-to-traditional-mindset">Some traditional hedge funds stick to traditional mindset</h2>
The report noted that two-thirds of conventional hedge funds do not plan to incorporate spot Bitcoin (<a data-ct-non-breakable="null" href="https://cointelegraph.com/bitcoin-price" rel="null" target="null" text="null" title="https://cointelegraph.com/bitcoin-price">BTC</a>) ETFs into their current digital-asset strategies.
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/thai-sec-proposes-crypto-products-mutual-private-funds" rel="null" target="null" text="null" title="null">Thai SEC floats allowing crypto products in mutual, private funds</a>
On Oct. 3, Quinn Thompson, the chief investment officer at Lekker Capital, said that buying Bitcoin in its then-current range of $61,000 was a “no-brainer.”
<figure>
 <img alt="47% of traditional hedge funds maintain crypto exposure: Report" src="https://s3.cointelegraph.com/uploads/2024-10/01927626-2219-7e4f-ae72-35fbdd4db466" title="">
 <figcaption style="text-align: center;">
 Source: <a data-ct-non-breakable="null" href="https://x.com/qthomp/status/1841666810791198787" rel="null" target="null" text="null" title="https://x.com/qthomp/status/1841666810791198787">Quinn Thompson</a>
 </figcaption>
</figure>
Basing the thesis on Bitcoin’s price action from March 5, when <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/bitcoin-price-sets-new-record-high-69k" rel="null" target="null" text="null" title="null">BTC reached an all-time high of $73,700</a>, Thompson highlighted a “similar setup” when Bitcoin defied a critical technical indicator.&nbsp;
He concluded that Bitcoin’s movement hinted prices may soon swing upward.&nbsp;
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/anti-aging-multi-millionaire-bryan-johnson-almost-devoted-life-crypto/" rel="null" target="null" text="null" title="null">Anti-aging tycoon Bryan Johnson almost devoted his life to crypto</a>

47% of traditional hedge funds maintain crypto exposure: Report

Table of Contents

Cointelegraph

Other articles published on Oct 10, 2024

FBI Charges Three Crypto Firms and 15 People for Fraud

Coinbase to Delist Non-Compliant Stablecoins in EU by December

SHIB Poised for 400% Surge — Analysts Say Jump In Now!

Aptos Blockchain Welcomes Franklin Templeton's Tokenized U.S. Government Fund

OKX Secures Derivatives VASP License from VARA

Real-World Assets Drive Growth in DeFi Sector

Join our free newsletter for daily crypto updates!