Regardless of bearish pattern, hedge funds are dipping their toes in crypto: PwC

Conventional hedge funds are slowly embracing cryptocurrency investments however are conserving their publicity restricted because the market continues to mature, based on new analysis from PricewaterhouseCoopers, or PwC.

In its 4th Annual World Crypto Hedge Fund Report 2022, PwC mentioned roughly one-third of conventional hedge funds surveyed are already investing in digital belongings akin to Bitcoin (BTC). So-called “multi-strategy” hedge funds have been almost certainly to speculate, adopted by macro technique and fairness technique companies, respectively.

Of the hedge funds presently invested within the crypto area, 57% have allotted lower than 1% of their complete belongings below administration. Two-thirds of the companies presently invested plan to extend their publicity by the tip of 2022.

Respondents cited “regulatory and tax uncertainty” as the one biggest barrier to investing. Particularly, hedge funds are involved a few fragmented regulatory setting globally in addition to unclear steerage on how the asset class might be ruled.

A complete of 89 hedge funds have been included within the survey, which was performed throughout the first quarter of 2022.

Hedge funds and different conventional asset managers have been eyeing developments within the crypto sector to gauge whether or not they need to start investing within the area. Whereas a number of hedge funds have launched crypto divisions and began investing within the area, the vast majority of companies stay on the sidelines. Apparently, a 2021 survey of 100 international hedge funds revealed that managers count on to allocate an common of 10.6% to crypto inside 5 years.

Associated: What’s driving establishments to put money into crypto? BlockFi’s David Olsson explains

Though crypto belongings have been in a protracted bear marketplace for a lot of 2022, institutional buyers seem like shopping for the newest worth dip. Inflows into Bitcoin funding merchandise, akin to exchange-traded funds and Grayscale’s GBTC product, elevated by $126 million final week, based on CoinShares. Bitcoin funding funds have quietly added over $500 million in web inflows this yr.