A recent survey shows that by 2026, hedge funds will substantially increase their exposure to cryptocurrencies. This is good news for the currency circle after the recent sharp drop in digital asset prices and the planned implementation of punitive new capital rules.
Global trust and corporate management company Intertrust recently conducted a survey of the chief financial officers of 100 hedge funds around the world and found that in 5 years, cryptocurrencies will account for an average of 7.2% of the assets of hedge funds.
In this global survey, the average asset management scale of hedge funds surveyed was US$7.2 billion. According to Intertrust’s survey, CFOs from North America, Europe and the United Kingdom expect that at least 1% of their investment portfolios will be cryptocurrencies in the future. CFOs in North America are optimistic, and their average proportion is expected to reach 10.6%. European peers are more conservative, with an average risk exposure of 6.8%.
According to Intertrust estimates, according to the data agency Preqin’s forecast of the total size of the hedge fund industry, if this trend of change spreads across the entire industry, on average, the size of cryptocurrency assets held by hedge funds may be equivalent to about 312 billion US dollars. What’s more, 17% of respondents expect their holdings of cryptocurrency assets to exceed 10%.
The findings of this survey mean that hedge funds’ interest in cryptocurrencies has risen sharply. It is not yet clear about the holdings of the industry, but some well-known fund managers have been attracted by the market and have invested a small amount of money in cryptocurrency assets, which reflects the growing enthusiasm of hedge funds and the common existence of more traditional asset management companies. Skepticism is in sharp contrast. Many traditional asset management companies are still worried about the huge volatility of cryptocurrencies and regulatory uncertainty.
AHL, a subsidiary of Man Group, has begun trading bitcoin futures, and Renaissance Technologies said last year that its flagship fund Medallion may invest in bitcoin futures. Well-known fund manager Paul Tudor Jones (Paul Tudor Jones) bought Bitcoin, while Brevan Howard, a European hedge fund management company, has been redirecting a small portion of its funds to cryptocurrencies. At the same time, the company’s co-founder, billionaires Rich man Alan Howard (Alan Howard) is a major proponent of cryptocurrency.
Bitcoin is the largest contribution to earnings of Skybridge Capital, a well-known American hedge fund company this year. The company was founded by former White House communications director Anthony Scaramucci. The company started buying bitcoin at the end of last year, and then reduced its holdings in April this year—just before the price of bitcoin fell from a high point.
David Miller, executive director of Quilter Cheviot Investment Management, said that hedge funds are not only fully aware of the risks of cryptocurrency, but also see its future potential.
Many traditional asset management companies are still worried about the huge volatility of cryptocurrencies and regulatory uncertainty. Morgan Stanley and Oliver Wyman, a consulting firm, stated in a recent report on asset management that cryptocurrency investment is currently limited to customers with high risk tolerance. Even so, this type of The proportion of investment in investable assets is usually very low.
Some hedge funds are still cautious about cryptocurrencies. For example, Paul Singer’s Elliott Management published a letter to investors in the Financial Times, stating that cryptocurrencies may become “the biggest financial scam in history.”
This year, cryptocurrency has experienced another crazy development. Bitcoin soared from less than US$29,000 at the end of last year to more than US$63,000 in April this year, but has since fallen back to more than US$40,000.
The future supervision of cryptocurrencies is still unclear. The Basel Committee on Banking Supervision stated last week that they should apply the most stringent bank capital management system of all asset classes.
Post time: Jun-16-2021