Hedge Funds Will Invest In Cryptocurrencies
Cryptocurrencies are slowly going mainstream as an increasing number of institutional investors seek to gain exposure to Bitcoin and others. The level of adoption is expected to grow bigger over the coming years as more investors enter the market.
According to the survey by Ernst & Young, 31% of hedge fund managers, 24% of alternative investors, and 13% of private equity managers said they planned to add crypto to their portfolios in the next one to two years.
The study added that managers of the largest firms–hedge funds overseeing more than $10 billion or investors with $2 billion to $10 billion–were most likely to be planning to invest in cryptocurrencies.
At the moment, most hedge funds are looking to invest in cryptocurrencies. The survey said only 7% of alternative fund managers and investors said they or their firms already have “crypto-related assets” in their portfolios. Some of the hedge funds are holding cryptocurrencies directly, while others are gaining exposure to BTC and other cryptos via futures, funds and exchange-traded funds.
Joe McCarney, the global blockchain assurance leader at EY, stated that “I believe that a larger catalyst for this movement into digital assets has been the continued enhancements to the institutional level controls being put in place at custodians and exchanges. These enhancements have helped to overcome some of the earlier concerns about the security of digital assets.”
The cryptocurrency space is now worth nearly $3 trillion, and it is expected to grow bigger over the coming months and years. Bitcoin remains the market leader and has a market cap above $1 trillion.