Conventional hedge funds are investing extra in cryptocurrencies than ever earlier than, not as a result of they all of a sudden grew to become true believers, however as a result of Donald Trump gave them the regulatory inexperienced gentle they wanted.
In accordance with a brand new report from the Different Funding Administration Affiliation and PwC, 55% of the world’s conventional hedge funds now maintain cryptocurrencies, up from 47% final 12 months.
Collectively, these funds oversee practically $1 trillion in belongings, in line with the report.
The survey, performed within the first half of 2025, reveals what has modified. President Trump has appointed heads of presidency businesses that won’t deal with cryptocurrencies as in the event that they had been radioactive supplies. He additionally signed the GENIUS Act, a brand new regulation that units new requirements for stablecoins. That is precisely what fund managers have been demanding for years.
“Regulatory uncertainty has been a serious barrier for many of those funds, and this 12 months we’re beginning to see that barrier eliminated. This 12 months’s report could possibly be a turning level by way of overcoming these obstacles,” stated James Delaney, head of regulatory technique at AIMA.
Hedge funds improve publicity and diversify merchandise
However this isn’t only a matter of authorized readability. Worry of lacking out on alternatives additionally performs a task. Nobody on Wall Avenue desires to be the idiot who skipped an asset class that continued to herald big and unpredictable returns.
This concern is prompting conventional hedge funds {and professional} managers alike to extend their publicity. A few of these specialised funds already maintain greater than 50% of their portfolios in cryptocurrencies. Others, like BlockSpaceForce, launched a brand new fund in 2025 to scoop up digital asset treasury corporations harm by the final crypto pullback.
Bitcoin stays the highest title on the fund’s steadiness sheet, however Solana has made the largest soar. In 2024, it was held by 45% of the fund, however this 12 months it rose to 73%. Ethereum is correct behind Bitcoin, however Solana’s sudden rise is actual.
Hedge funds now allocate on common 7% of their portfolios to cryptocurrencies, up barely from 6%. Greater than half nonetheless have commitments under 2%, however 71% of funds surveyed stated they plan to extend their commitments over the following 12 months.
Brevan Howard Asset Administration has employed a former government from Peter Thiel’s household workplace to guide its crypto technique staff.
Stephen Cohen’s Point72 Asset Administration and Paul Singer’s Elliott Funding Administration each have ETFs tied to Bitcoin and Ethereum. The variety of hedge funds utilizing crypto ETFs has elevated from 25% final 12 months to 33% this 12 months.
Derivatives prepared the ground, DeFi turns into the goal
Not everybody collaborating is betting that costs will rise, as some funds open positions in cryptocurrencies to revenue from value fluctuations. Some individuals use foundation buying and selling to quick futures and regulate the unfold whereas buying ETFs with out touching the precise Bitcoin.
In accordance with the Alternate options report, 67% of funds with publicity to cryptocurrencies use derivatives to guess on value actions, up from 58% in 2024.
Spot crypto buying and selling additionally elevated from 25% to 40%. This implies extra corporations are shopping for and promoting actual cryptocurrencies.
52% of fund managers stated they had been all for primarily tokenizing their funds and offering entry to their merchandise by means of cryptocurrency networks, as BlackRock already does with its mutual funds. This concept of turning fund shares into tokens on the blockchain is gaining recognition.
And there is much more occurring in DeFi. 43% of conventional hedge funds concerned in cryptocurrencies stated they plan to begin or develop their actions in decentralized finance within the subsequent three years. A 3rd consider DeFi may finally utterly disrupt their enterprise.
