More Hedge Funds are Investing in Cryptocurrency Despite Volatility: PwC
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In a linked news release, John Garvey, the global financial services leader at the PwC United States said,
"The recent collapse of Terra graphically exposed the potential hazards in digital assets. There will be more volatility, but the industry is maturing, which means that more crypto-focused hedge funds and larger AuM, and more traditional funds will enter the crypto field."
Traditional Hedge Funds
Traditional hedge funds are investing in digital assets at 38 percent, up from 21 percent a year ago. The number of specialist crypto hedge funds is expected to be over 300 worldwide, with the number of new ones appearing faster in the last two years.
According to the survey, most traditional hedge funds are still dipping their toes in the water, with less than 1% of total assets under management (AuM) in digital assets. Nonetheless, digital assets account for between 5% and 50% of AuM for 20% of these funds. Furthermore, by the end of the year, two-thirds of funds presently investing in digital assets want to increase their investments.
Despite the volatility of cryptocurrency, crypto hedge funds continue to rise rapidly. According to PwC's report, the typical crypto fund made a 63.4 percent return in 2021. Nonetheless, this was a far cry from the +127.55 percent median return of 2020.
