The adoption of cryptocurrency assets has been on the rise since the start of 2021. Leading banks and financial management firms have started offering services in digital assets. According to a recent study conducted by Intertrust Global, international hedge funds are planning to increase their exposure to Bitcoin and other cryptocurrency assets over the next five years.
Intertrust surveyed chief financial officers (CFOs) of various global hedge funds. According to the results, 98% of CFOs are expecting their hedge fund to invest in Bitcoin and other cryptocurrency assets by 2026.
In terms of crypto exposure, around 16% of the respondents are planning to invest at least 10% of their funds in cryptocurrency assets. In North America, respondents expect to invest nearly 10.6% in digital assets.
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“From an investor perspective, CFOs are going to have to really ensure they have those controls in place for investors to be comfortable. If one in six expects to invest more than 10% in crypto, then one in six will need to be prepared for that investment,” Jonathan White, Global Head of Fund Sales at Intertrust Group, commented about the growing interest in cryptocurrency investments.
Cryptocurrency Market and Hedge Funds
Since the start of this year, several hedge fund managers including Ray Dalio and Dan Loeb revealed their cryptocurrency holdings. Earlier this month, a London-based investment management firm, Ruffer Investment announced that the company has made nearly $1 billion on its Bitcoin holdings. In the latest survey results, Intertrust Global highlighted the performance of cryptocurrency assets and mentioned that hedge funds need good preparations before entering the crypto market.
“It comes after a stellar performance from cryptocurrencies such as Bitcoin and Ethereum in the past year and growing interest from institutional and retail investors in digital assets. Hedge funds will need to prepare for this change in their allocation. They will need to think about where the assets are custodied, how they strengthen their operational controls around crypto investments, and how they verify the assets,” the report states.