Many hedge funds intend to make reasonable allocations to digital assets in the future years, according to an Intertrust poll of 100 hedge fund managers throughout the world.
Hedge funds plan to hold 7.2 percent of their assets in cryptocurrencies by 2026, according to a recent poll performed by fund administrator Intertrust.
Hedge funds are making plans to invest in cryptocurrencies.
Global hedge funds consider investing a small percentage of their portfolios in cryptocurrencies due to their long-term potential.
According to the Financial Times and Intertrust study of 100 top hedge fund managers predicts that cryptocurrencies will account for 7.2 percent of hedge fund assets in five years. Seven percent of respondents polled anticipate investing more than 10% of their assets in cryptocurrency.
Because of the recent market meltdown and capital limits imposed by banks worldwide last Thursday, the timing of the study is significant in establishing “a big vote of confidence for digital assets,” according to the article.
By dedicating a modest fraction of their portfolios to crypto for a long time, these hedge funds reduce short-term regulatory and price volatility concerns. Nonetheless, 7.2 percent is more than the widely acknowledged share of 1-5 percent pushed in recent months by industry giants such as Square Inc.
The economic crisis caused by the COVID-19 lockdowns sparked a flood of institutional money into Bitcoin in the second half of 2020. Many people’s investing thesis for Bitcoin is based on inflation worries. In the face of massive quantitative easing by governments worldwide, leading hedge fund managers like Paul Tudor Jones embrace BTC as an inflationary hedge.
In addition to Bitcoin, many institutions have lately begun to pay attention to the number two cryptocurrency, gaining traction in the financial services sector due to increased competition. Ethereum is now the most popular platform for decentralized financial users and developers (DeFi).
Grayscale inflows, favorable opinions from big firms like Brevan Howard, and ETH listings on prominent futures exchanges and brokerages all point to an institutional interest in Ethereum. According to statistics from Glassnode, the most prominent digital asset management fund, Grayscale, witnessed $550 million in total transactions to its Ethereum Trust Fund this year. On the other hand, the Bitcoin Trust has added approximately $3 billion in Bitcoin this year.