A global poll of chief financial officers revealed that hedge funds may significantly increase their cryptocurrency holdings. Based on their predicted average numbers, these funds will retain more than 7% of their assets in cryptocurrencies in the next five years.
Hedge fund CFO expects crypto investment to increase significantly
The survey was conducted among 100 CFOs around the world, indicating that hedge funds plan to significantly expand their exposure to cryptocurrencies by 2026. Reuters described the poll results as a major vote of confidence in digital assets, which has fallen after the recent market, and plans to implement stricter capital supervision.
Intertrust, the fund manager, detailed that executives believe that their fund will hold 7.2% of all cryptocurrency assets in five years, which is about 312 billion U.S. dollars based on estimates of the size of the industry. Although this is the average prediction of the sample, 17% of respondents have higher expectations, stating that hedge funds may manage more than 10% of cryptocurrencies.
It is currently impossible to obtain accurate data on the current holdings of encrypted assets in the industry, but the report pointed out that several well-known companies in the industry have committed a certain amount of digital assets. The article details that the increase in cryptocurrency prices over the past year and “the inefficiency of the market where they can arbitrage” have driven investment.
Hedge fund survey reveals growing enthusiasm for Bitcoin
Although most traditional asset management companies are still skeptical of cryptocurrencies, mainly because of their high volatility and uncertain future, surveys by hedge funds have shown increasing enthusiasm. David Miller, executive director of Quilter Cheviot Investment Management, stated that hedge funds “not only understand the risks of crypto assets very well, but also very well” the long-term potential of crypto assets.
Companies that have invested in crypto include Man Group, which trades bitcoin futures through its AHL division, and Renaissance Technologies, which announced last year that its Medallion fund can also buy futures contracts. Reuters also reminded that hedge fund managers Paul Tudor Jones, Brevan Howard and Skybridge Capital have also invested some funds in the crypto sector.
The hedge funds in the Intertrust survey had an average of US$7.2 billion in assets under management. Earlier this year, the price of Bitcoin (BTC), the largest cryptocurrency by market capitalization, rose to a record high of over US$63,000, but has since fallen to around US$40,000 per coin. At the same time, it is not clear how the upcoming regulations will affect the global cryptocurrency sector and ultimately affect the valuation of most digital currencies today.
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