According to a report by PwC, volatility in the crypto market has not prevented traditional hedge funds from investing in crypto.
PwC has released its 4th Annual Global Crypto Hedge Fund Report 2022. According to the report, market volatility has not prevented traditional funds from investing in crypto. 38% of traditional hedge funds surveyed invest in cryptocurrencies. This means a 21% increase over the previous year. John Garvey, PwC USA Global Financial Services Leader, said in the report:
“Terra’s recent collapse vividly demonstrated the potential risks in digital assets. Volatility will remain, but the market is maturing, and with it not only crypto-focused hedge funds are proliferating or their AUMs (assets under management) are rising; also, traditional funds entering the crypto space are also increasing.”
The average asset under management (AuM) value of the surveyed specialist crypto hedge funds, from $23 million the previous year, more than doubled to approximately $59 million. Also, from 2020 to 2021, the percentage of crypto hedge funds with an AuM value exceeding $20 million increased from 46% to 59%.
According to the survey, 86% of hedge funds traded with Bitcoin (BTC), as would be expected. Ethereum (ETH) with 81%; Solana (SOL) 56% and Polkadot (DOT) 53%; Terra (LUNA) followed with 49% and Avalanche (AVAX) with 47%.
