Despite facing turmoil, cryptocurrencies still hold a vibrant appeal, as reaffirmed by a recent PwC hedge fund survey. The fifth annual assessment, conducted in Q1 this year, discloses a somewhat optimistic outlook amidst the so-called crypto winter. About 93% of crypto-native hedge funds anticipate a market cap increase, bringing validations transforming the traditional skepticism into a sphere of enhanced interests.
Despite the majority revealing no exposure to FTX or the Terra Luna ecosystem, these funds possess the capacity to outperform BTC‘s price this year, which is a notable point. Studies have shown that more than half of these funds are based in the United States, where regulation doesn’t seem to implicate significant impacts, as suggested by 42% of the polled funds.
While crypto hedge funds continue their popularity among investors seeking exposure to this sphere, a moderation from the rising suns of the asset has been noticed. From 37% participating in 2022, only 29% of traditional hedge funds now invest in the crypto market. Hence, the narrative of 2023 presents a mixed bag: traditional players creeping out, but the remainders, about 46%, intending to increase their crypto investments.
Several reasons are attributed to the averseness shown by traditional hedge fund managers: client reactions, reputational risks, and regulatory uncertainties. Interestingly, even the elimination of regulatory barriers wouldn’t persuade 40% of non-investors to begin crypto investments.
Simultaneously, the interest in tokenized securities remains eerily limited. Only a fractional 15% of funds are mulling over investments here, while an even lesser 4% tokenize units in their funds. The sudden dip in tokenization says a lot about its potential and acceptability.
The PwC report highlights a discernible shift in the investing patterns. Yet, the infused resiliency in the crypto world, enhanced by the decentralization proponents, still draws a varied pool of investors, highlighting the intricate interplay of skepticism and optimism in this ever-evolving financial landscape.
Source: Cointelegraph
