Hedge Funds Believe in the Sustainability of Cryptocurrency
Date: 2023-07-14 Author: Karina Ziganova Categories: IN WORLD
The share of hedge funds investing in cryptocurrency decreased from 37% to 29% in 2023. However, their confidence in the value proposition and long-term sustainability of crypto assets remains, according to the PwC report.
Analysts said that traditional hedge funds with current cryptocurrency investments plan to either maintain or increase their investments. This is despite market volatility and ongoing regulatory uncertainty that have challenged the sector.
Over the past year, the average share of traditional hedge funds in cryptocurrency has increased from 4% to 7%. However, just over half of the traditional funds surveyed said they were unlikely to invest in cryptocurrency in the next three years.
"Despite market volatility, falling digital asset prices and the collapse of a number of crypto businesses, crypto asset investment is expected to remain high in 2023," said John Garvey, head of global financial services at PwC in the United States.
According to him, traditional hedge funds that focus on the market for the long term are not only increasing their crypto assets under management.
Uncertainty puts pressure on funds
However, regulatory uncertainty continues to weigh on many funds. Therefore, more than half of those surveyed will invest more as soon as there is greater transparency, regulatory certainty and risk management.
The report states that 23% of traditional hedge funds are reconsidering their cryptocurrency strategy due to the regulatory environment in the US, while 12% of cryptocurrency hedge funds are considering moving out of the country.
What investors are waiting for?
Another survey showed that professional investors are still interested in cryptocurrency, but first they want to get the support of large traditional financial institutions.
Moreover, about 82% of investors surveyed reacted positively to Bitcoin (BTC) and Ether (ETH), and another 88% noted that they are thinking about investing in cryptocurrency. At the same time, most survey participants are not ready to invest in memecoins, including PEPE or DOGE.
