PwC: A third of traditional hedge funds invest in digital assets

Auditing firm PwC said most hedge funds invest less than 1% of their holdings in cryptocurrencies due to regulatory uncertainty in the industry.

According to research PricewaterhouseCoopers (PwC), traditional hedge funds are slowly embracing investing in digital currencies but are limiting their risks as the market is still evolving. In the Global Crypto Hedge Fund’s fourth annual report, the company revealed that roughly a third of surveyed hedge funds from the traditional financial system are already investing in digital assets.

Among them are multi-market hedge funds whose strategy is to be present in several industries at once, as well as investment companies. Of those funds that are currently investing in crypto assets, about 60% said they have allocated less than 1% of their assets for investment in the industry. Of these, two-thirds plan to increase their share by the end of this year.

The biggest barrier to investment has been regulatory and tax uncertainty. In particular, hedge funds are concerned that the world does not have a single regulatory system that regulates the industry in the same way for everyone. Moreover, the stated plans for regulation also vary from country to country, and even from state to state in the US.

A total of 89 hedge funds participated in the survey, the rest of the traditional asset managers said they are monitoring the development of the cryptocurrency sector to assess whether they should start investing in this industry. Only a few companies have begun to actively invest in a new area, while most firms remain on the sidelines.

Earlier, PwC analysts said that by 2025 the vast majority of organizations will use the blockchain, and by 2030 the industry will add $1.76 trillion to global GDP.