One In Five Hedge Funds Dabbling In Crypto: PoW Report

A considerable portion of traditional hedge funds is reportedly already investing in cryptocurrencies.

What Happened: According to a recent PwC report, 21% of traditional hedge funds surveyed by the organization are already investing in digital assets such as Bitcoin BTC/USD, with an average allocation of 3% of the total assets under management.

86% of the surveyed traditional hedge funds that invested in cryptocurrencies, intend to destine more capital to this asset class by the end of the year, while only 14% planning to keep their exposure to digital assets at its current level.

Regulatory uncertainty is seen as a barrier to investing in cryptocurrencies by 82% of the respondents, with client reaction and reputational risk being cited by 77%.

68% of the respondents simply believe that digital assets fall outside the scope of their investment mandates, and 64% do not feel knowledgeable enough about this asset class.

PwC's survey was conducted in this year's first quarter with 39 hedge funds that managed an estimated $180 billion. More than 60% of the responses came from hedge funds managing over $1 billion.

The study also estimates that the total assets under management of crypto-specific hedge funds increased from $2 billion in 2019 to nearly $3.8 billion in 2020.