Hedge funds might significantly increase the exposure to cryptocurrencies in five years. A new survey showed that the company has a significant vote of confidence for digital assets after recent price falls. Fund administrator Intertrust surveyed 100 chief financial officers globally. It found out that executives might hold an average of 7.3 percent of their holdings in cryptocurrencies in the next five years.
I. 17% of respondents expected to have around 10% in crypto. This might represent an increase in appetite in hedge funds. However, current holdings in this sector seem unclear.
Still, many managers have already committed small amounts to crypto assets. They were attracted by changeable prices and market inefficiencies that they could arbitrage. Man Group traded bitcoin futures in the computer-driven unit. At the same time, Renaissance Technologies said that its flagship Medallion fund might invest in bitcoin futures last year.
Paul Tudor Jones, Hedge fund manager, bought into Bitcoin. At the same time, Brevan Howard shifted a small number of funds into crypto, while its co-founder and billionaire Alan Howard represented a significant backer of this industry. This year, Bitcoin is the essential contributor to gains. The former White House communications director Anthony Scaramucci at US fund firm SkyBridge Capital started to buy bitcoin late last year and later trimmed its holdings before the token price fell.
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Executive director at Quilter Cheviot Investment Management David Miller said that Hedge funds are well aware of the risks in the long-term potential of cryptos. Hedge funds show the growing enthusiasm in sharp contrast to widespread skepticism in more traditional asset managers. Many of these managers remain concerned about cryptocurrencies’ uncertainty and volatility overregulating them.