According to PwC Global Crypto Hedge Fund’s 4th annual 2022 report, cryptocurrency volatility hasn’t stopped traditional hedge funds from investing in digital assets.
“The recent Terra crash clearly demonstrated the potential risks of digital assets. Volatility persists, but the market is maturing, and with it the cryptospace is entering not only cryptocurrency hedge funds and asset managers, but also more traditional funds,” the article said.
Of the traditional hedge funds surveyed, 38% of respondents started investing in digital assets. In 2021, that number was 21%.
In turn, the number of specialized cryptocurrency hedge funds is more than 300 institutions worldwide.
According to the report, most traditional hedge funds are still in their infancy, as 57% of them hold less than 1% of their total investment portfolio in digital assets.
However, 20% of these funds have invested between 5% and 50% of their capital in cryptocurrencies.
The study also reports that two-thirds of the funds already investing in digital assets intend to invest more in them by the end of 2022.
For 2022, the average amount invested in cryptocurrencies among funds is $59 million; in 2021 it was estimated at $23 million.
86% of cryptocurrency hedge funds invested in bitcoin, another 81% in Ethereum; 56% in Solana, 53% in Polkadot, 49% in Luna and 47% in Avalanche.
The number of traditional fund managers who don’t invest in digital assets dropped from 79% in 2021 to 62% in 2022.