Every fifth hedge fund already invests in cryptocurrencies, reports PwC
On Monday, market research company PwC published their quarterly hedge fund industry report, which shows that cryptocurrencies, as well as other types of digital assets, have come a long way since 2015, when the price of Bitcoin was around $200 and newly created hedge funds focused on the space were launched in droves.
In its recent report PwC mentions that according to its survey, 20% of hedge funds are already involved in cryptocurrency investments, while another 56% of hedge funds are considering investing in this asset class in the near future. And here is a key point of the report, which says that cryptocurrencies, such as Bitcoin, are becoming more attractive to those investors who are seeking for higher returns when compared to traditional investments.
Several studies shed light on the crypto-industry: 38% of institutional investors could already be involved in cryptocurrencies, according to a survey by the American firm Autonomous Next, which also reveals that 86% of them consider that this market could grow notably.. Read more about new cryptocurrency and let us know what you think.
News ‘ Bitcoin ‘ Investments Hedge funds that focus on cryptocurrencies will have doubled their assets under management by 2020, researchers at PricewaterhouseCoopers found. Liam Frost – 24. May 2021 at 20:00 UTC – 2 min read Some 21% of traditional hedge funds worldwide have already invested in cryptocurrencies, while crypto-focused funds have doubled their assets under management (AUM) by 2020, according to a new report from professional services network PricewaterhouseCoopers (PwC). We estimate that total assets under management (AuM) of crypto hedge funds worldwide will have grown from $2 billion last year to nearly $3.8 billion by 2020. The percentage of crypto hedge funds with AuM over $20 million increased from 35% to 46% by 2020, the firm said.
Hedge funds bet on cryptocurrencies
According to the third annual PwC Global Crypto Hedge Fund Report, bitcoin is the most popular asset, as 92% of crypto funds trade it. This coin is followed by Ethereum (67% of funds traded it), Litecoin (34%), Chainlink (30%), Polkadot (28%) and Aave (27%). Meanwhile, the vast majority of investors in crypto hedge funds are high net worth individuals (54%) and family offices (30%). The median note size is $0.4 million and the average note size is $1.1 million. More than half of crypto hedge funds have an average ticket size of $0.5 million and below. Crypto hedge funds have an average of 23 individual investors, according to the report. At the same time, one in five traditional hedge funds – or about 21% – now also invest in cryptocurrencies. On average, these organizations have about 3% of their assets under management in digital assets, but almost all (85%) are already planning to acquire more cryptocurrencies by the end of 2021.
Challenges to crypto-currency adoption
In addition, 26% of hedge fund managers who do not invest in cryptocurrencies said they were planning to invest in digital assets or had recently planned to do so. But 82% of them also said that regulatory uncertainty is one of the main barriers to cryptocurrency adoption. 50% of funds already investing in digital assets said that cryptocurrencies are a big challenge. They cited the high risk of client reaction/reputation (77%) and the fact that cryptocurrencies are not part of their current investment mandates (68%). Almost two-thirds of those surveyed by PwC also admitted to having insufficient knowledge of digital assets. But if the aforementioned barriers to entry are removed, 64% of hedge funds will definitely start/accelerate their participation/investment or possibly change their approach and become more involved in cryptocurrencies, the report concludes.
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According to a report published by auditing firm PwC, nearly one in five hedge funds and asset management firms have invested in cryptocurrencies. The report, titled “Cryptocurrency: How to invest in an uncertain world”, was published after a survey of over 200 finance companies that manage a combined $400 billion in assets. The report indicates that companies that have invested in digital currencies are more likely to feel that “the world of cryptocurrency trading is here to stay,” and that cryptocurrencies will eventually become “the new asset class”.. Read more about bitcoin news today and let us know what you think.
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