Bitcoin is a favorite of financial monsters, despite the falling market

Bitcoin is becoming more popular, but… – Return in 2021 hedge funds focused on cryptocurrencies exceeded traditional funds. Given these results, are they now betting on new finance assets?

Hedge funds and cryptocurrencies: (always) careful opening

PricewaterhouseCoopers (PwC) has released a reportadoption cryptocurrencies for traditional hedge funds. The document contains key figures on this issue. These data were obtained, in particular, from a survey conducted in the first quarter of 2022 with the participation of 89 hedge funds.

AND 3 statistics provide an overview of the current and future level of raising these funds in cryptocurrency:

  • About a third of survey participants invest in digital assets;
  • 57% of funds already allocated to cryptocurrencies have been allocated to the sector by at least 1% of their assets under management;
  • If 2 thirds of these funds plan to increase their investments in the industry, then by the end of 2022.

What do these figures show? These data indicate, on the one hand, about a gradual adoption cryptocurrency hedge funds. But they also show, on the other hand, as well limited exposure the latter to this new asset class.

How do these funds explain their funds careful approach against cryptocurrencies? Respondents mention the survey “Regulatory and tax uncertainty” as a major barrier to investment in this sector.

In particular, hedge funds fear 2 points related to regulations:

  • Differences in the regulatory framework for cryptocurrencies at the global level;
  • Lack of clarity on guidelines for managing this asset class.

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Crypto-bear markets: are funds still growing on bitcoin and its cadets?

A better understanding of the context allows for a deeper interpretation of previous data. The crypto-bear markets give a special color to this study. Really, bitcoin (BTC) and its juniors are experiencing a bear market in 2022. Thus, the bull rally of 2021 this year gave way to cryptozymes.

The fall prices for bitcoin illustrates quite well the scale of the decline in the markets. However, the price of cryptocurrency reached a historical maximum around $ 69,000 in November 2021. After that, he failed to reconnect with $ 50,000 in 2022. He will even return under bar $ 30,000 This year.

What does this knowledge of context add to the analysis of figures published by PwC? According to these data, these funds already want to invest in cryptocurrencies increase their exposuredespite these market shocks.

This prospect is obviously encouraging for the cryptosphere. But these statistics we are currently disclosing only one intentions. In fact, the decisions that shape reality may change as the situation changes.

Another issue may be the conclusion of this article. AND strong recovery in crypto markets will this be mechanically accompanied by an increase in investment in cryptocurrencies at the expense of these funds?

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