A recent Bloomberg report has claimed that crypto exposure among institutional investors, mainly hedge funds, is gradually rising.
A Bloomberg report has reported a rise in institutional crypto investors. A major chunk of this has been attributed to hedge funds. According to the report, almost half of all hedge funds have crypto exposure. The report credited the crypto ETFs in the US and Asia for being the enabler of this trend.
The report stated, “Among hedge funds trading in traditional markets, 47% had exposure to digital assets, up from 29% in 2023 and 37% in 2022..”. It further added that 67% of these funds plan to maintain their exposure, while the rest would increase their investments in crypto.
In 2024, 58% of the hedge funds traded derivatives, while 25% traded in the spot market in crypto. However, in 2023, this number amounted to 38% and 69%, respectively. The increasing number of hedge funds investing in crypto bodes as an encouraging factor for the industry. The report also quoted fund managers who claimed sentiments in crypto assets had improved in the recent past. Most described how traditional trading strategies were effective in the crypto market as well.
Meanwhile, the report also stated how some investors were still reluctant to invest in crypto assets. While this is along expected lines, the rise of institutional crypto investors is something to ponder on positively for the crypto space. The latter is still on the path towards becoming a mainstream destination for investments.
The support from institutional crypto investors only makes it all the more worthy of trust from traditional investors. Moreover, the rising inflows into the crypto market through the ETFs are also a positive sign.
The crypto ETFs, after receiving approvals from regulators in 2024, have seen billions in cumulative inflows.
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