71% of hedge funds plan to expand crypto exposure

Global hedge funds are planning to expand their presence in the crypto sector despite a dip in prices.

71% of hedge funds that have invested in digital assets are planning to boost their exposure, according to new research from the Alternative Investment Management Association and PwC.

55% of traditional hedge funds, which shunned the crypto sector for years, now have some form of crypto exposure, up from 47% in 2024.

Some of the world’s biggest traditional hedge funds, including Millennium Management, Brevan Howard, DE Shaw and Schonfeld, are holdings Bitcoin ETFs.

“This year’s survey marks a turning point, with digital assets now moving from the margins toward the mainstream of hedge fund and institutional investing. As clearer rules and guidance emerge under the new US administration and market infrastructure continues to mature, confidence, capital and conviction in digital assets as an investable asset class are clearly on the rise,” said James Delaney, Managing Director, Asset Management Regulation at AIMA.

“As hedge funds look to generate long-term returns, hedge against risk, and diversify their portfolio allocations during lingering macroeconomic volatility and uncertainty, the rise in digital asset exposure highlights the impact of regulatory engagement in the last year. But while many leading financial centres have reformed their regulatory regimes, half of traditional hedge funds with no current crypto exposure continue to cite factors such as regulatory or tax uncertainty, and investment mandates, as a barrier to investing,” said Albertha Charles, Global Asset & Wealth Management Leader at PwC UK.

Despite optimism, 2025 remains one of the toughest years for the crypto market. Since October, the crypto market cap has plunged by more than $1tn.

Bitcoin has dropped by more than 20% while Ethereum has crashed by more than 30%.

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