Hedge Funds’ Long-Term Crypto Interest Remains Robust Even as Proportion Investing Drops: PwC

The proportion of conventional hedge funds investing in crypto belongings declined up to now 12 months although the long-term outlook stays optimistic, in accordance to a new report by Huge 4 accounting agency PricewaterhouseCoopers (PwC).

The proportion of funds with crypto publicity fell to 29% from 37% in 2022, in line with the World Crypto Hedge Fund Report. No conventional hedge funds plan to lower their publicity this yr, it stated.

Greater than a 3rd (37%) of funds with out crypto publicity stated they’re curious, however are ready for the asset class to mature additional. That’s up from the 30% reported a yr in the past. Greater than half, 54%, stated they’re unlikely to put money into the following three years, in contrast with 41% within the earlier report.

Total, the report speaks to a blended sentiment towards crypto from conventional monetary establishments, with “regulatory uncertainty” the watch phrases, as is commonly the case. PwC discovered that just about 1 / 4 of hedge funds are reassessing their methods due to the regulatory environment in the U.S., with 12% contemplating relocating from the U.S. to extra crypto-friendly jurisdictions.

“Regardless of market volatility, a fall in digital asset costs and the collapse of a lot of crypto companies, funding in crypto-assets is anticipated to stay sturdy in 2023,” Jon Garvey, PwC United States’ world monetary providers chief, stated. “Conventional hedge funds, dedicated to the market in the long term, should not solely rising their crypto-assets beneath administration, but in addition sustaining – if not rising – the quantity of capital deployed within the ecosystem.”