Hedge funds plan to significantly increase the share of investments in cryptocurrencies by 2026. Writes the Financial Times with reference to a study by the Intertrust fund. According to a survey of hedge fund CFOs around the world, they plan to hold 7.2% of their assets in crypto on average in five years. Based on a predictive estimate of the hedge fund market from analyst firm Preqin; Intertrust predicts that by 2026 hedge funds will hold around $ 312 billion in digital assets.
The survey presents the views of 100 senior respondents. Divided into continental Europe, the United Kingdom, North America and Asia, who are in one form or another responsible for the financial sector, controlling USD 7.3 billion of average assets under management.
Funds from North America show the greatest interest in cryptocurrencies
The greatest risk appetite was demonstrated by funds from North America. On average, they expect that in five years, 10.8% of their assets will be in cryptocurrencies.
As noted by the FT, the exact size of hedge fund investments in cryptocurrency is currently unknown. But in the next five years, this “share should increase significantly”. Already at this stage, a number of well-known funds and their managers were invested in this asset. Among them are the Brevan Howard Foundation and billionaire manager Paul Tudor Jones. He recently announced that he invests in Bitcoin up to 5% of his capital. Such an investment will make it possible to better diversify its investment portfolio.
In early June, the popular US broker Interactive Brokers promised its clients access to cryptocurrency trading by the end of the summer. Interactive Brokers customers can now trade Bitcoin futures on the broker’s electronic platform.
For SkyBridge Capital Bitcoin has become the main source of profit at all. The company invested in cryptocurrency at the end of 2020. But reduced investments in it in April, shortly before the asset plummeted in price.
Intertrust acknowledges that the observed surge in cryptocurrency interest comes “following the stellar performance of cryptoassets such as Bitcoin (BTC) and Ethereum (ETH)” over the past year. As well as the growing interest of institutional and retail investors in digital assets.
Not everyone shares crypto optimism
As the FT notes, not all hedge funds are optimistic about Bitcoin and other cryptocurrencies. For example, in a letter to investors this year, Paul Singer’s Elliot Management fund indicated that cryptocurrencies could be “the greatest scam in history”.
According to David Miller, executive director of Quilter Cheviot Investment Management, hedge fund managers “are aware of not only the risks of such investments, but also the potential for long-term return”. At the same time, the share of such investments will remain not too large. Since the risks of investing in cryptocurrencies are too high.
A recent survey by Bank of America showed that 81% of large financial institutions consider BTC to be a regular bubble and aren’t ready to invest their capital in it.
Recall, however, that according to the latest PwC report, 21% of “classic” hedge funds with AUM of $ 180 billion have already invested an average of 3% of assets in the new class of instruments. 85% of them planning to increase this volume. 26% don’t rule out adding cryptocurrencies in the future.