Hedge funds seem intent on holding 7% of their assets in cryptocurrencies within five years.
This was revealed in a recent survey published by the Financial Times, according to which this forecast could equate to total invested assets of around $312 billion.
The survey was conducted among 100 global hedge fund CFOs, and was carried out by fund administrator Intertrust.
The result was that, on average, these executives said their funds plan to hold 7.2% of their assets in cryptocurrency by 2026. In addition, 17% of respondents said they expect to exceed 10%.
Extending this percentage to the entire hedge fund industry, total assets invested in cryptocurrencies could be around $312 billion, using as a metric the group’s forecast for the total size of the hedge fund industry.
Should this scenario play out, this would be a significant increase in the volume of crypto assets held by hedge funds, although $312 billion is less than half the market capitalization of bitcoin alone to date.
Hedge funds and crypto assets
At the moment, it is not known exactly how many crypto assets are held by hedge funds, as only a very limited number have declared their ownership, although these figures are still very small.
One of the hedge fund managers closest to the crypto world, Paul Tudor Jones, has so far invested only 1% of his assets, although he has stated that he wants to increase this to 5%.
Also Anthony Scaramucci of SkyBridge Capital has declared his support for bitcoin, but reduced his holdings in April due to fears of a price drop, which has since occurred.
The executive director of Quilter Cheviot Investment Management, David Miller, said hedge funds are well aware of the risks they run by investing in crypto assets, but also of their long-term potential.
However, there are also those, such as Paul Singer of Elliott Management, who believe that cryptocurrencies could become the biggest financial scam in history.
Nevertheless, the survey revealed that all executives surveyed in North America, Europe and the UK expect to have at least 1% of their portfolio in cryptocurrencies. Indeed, North American funds expect an average exposure of as much as 10.6%, while those in the UK and Europe only 6.8%.
