Digital Assets and Hedge Funds

By Edith Muthoni / Finance Expert/TradingPlatforms

7% of global hedge fund assets will be in cryptocurrencies by 2027. Data points to growth in crypto investments in hedge funds.

Edith Reads, an analyst at TradingPlatforms, talked about the data. She said: “The growing crypto optimism in hedge funds is great. It stands in stark contrast to the general skepticism of more traditional asset managers. Traditional asset managers are worried about crypto volatility and regulations unclear. However, interest in cryptos in hedge funds continues to grow.”

Cryptocurrency in hedge funds continues to rise.

It is unclear how many digital assets are available in hedge funds, as most owners remain secret. Investors who disclose their financial information remain incredibly small. Still, cryptocurrency in hedge funds continues to rise.

The institutional investor is one of the reasons there has been a rise in crypto in hedge funds. The big penny inflow has legitimized digital assets and encouraged other investors to put their money into cryptocurrencies.

Crypto hedge funds will perform better

Different strategies produce varying degrees of performance. Although crypto in hedge funds seems to be on the rise, the pace is not high. Its market neutrality remained low compared to the broader crypto market.

Additionally, the 2021 bull market has not produced the same degree of gains as 2020 in the context of the larger crypto market.

Thus, there is a demand for various trading techniques to suit the economic environment. The hedge fund market environment is set to change and its structures will be more sophisticated.

The fundamental value proposition of hedge funds includes volatility and returns, which is essential to know. Cryptos in hedge funds may offer less attractive investment opportunities than traditional ones. However, good investment strategies could control the volatility of cryptos.

Cryptos have been around for a while, but they only recently became popular. Their popularity is linked to their decentralization, security and transparency. It is these qualities that make them attractive to investors. The full story and stats can be found here: 7% of global hedge fund assets will be in cryptocurrencies by 2027

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