Traditional hedge funds are showing a decreased interest in investing in crypto assets, according to a recent report by PricewaterhouseCoopers (PwC). The Global Crypto Hedge Fund Report revealed that the percentage of funds with crypto exposure dropped from 37% to 29% in the past year.
Despite this decline, the long-term outlook for crypto investments remains positive. The report found that no traditional hedge funds are planning to decrease their exposure to crypto assets this year. However, more than a third of funds without crypto exposure are still hesitant, with 37% waiting for the asset class to mature further.
The report also highlighted the mixed sentiment toward crypto from traditional financial institutions, citing “regulatory uncertainty” as a major concern. Nearly a quarter of hedge funds are reevaluating their strategies due to the regulatory environment in the U.S., with some considering relocating to more crypto-friendly jurisdictions.
Jon Garvey, PwC United States’ global financial services leader, remains optimistic about the future of crypto investments. He stated, “Despite market volatility, a fall in digital asset prices, and the collapse of a number of crypto businesses, investment in crypto-assets is expected to remain strong in 2023.”
Overall, while the proportion of traditional hedge funds investing in crypto assets may have declined, the report indicates that long-term interest in the crypto market remains robust.
