55% of Hedge Funds Hold Crypto, 71% Plan to Boost Allocation
A new AIMA survey of 122 hedge fund managers overseeing $982 billion finds 55% now hold crypto assets, up from 47% last year. Funds allocate an average 7% of their portfolios to digital assets—most under 2%—with leading coins like Bitcoin (BTC) and Ethereum (ETH) favored. 71% plan to increase crypto exposure over the next year, primarily via derivatives (67%) rather than direct holdings. Recent flash crashes have exposed vulnerabilities in leveraged trading and infrastructure. Nearly half cite evolving US regulation—such as the GENIUS Act and bipartisan crypto market bills—and improved policy clarity as key drivers, while unresolved tax issues and restrictive mandates keep some funds cautious.
Bullish
Rising crypto allocations by hedge funds signal growing institutional confidence, likely boosting liquidity and stabilising prices for leading coins. In the short term, increased use of derivatives may add volatility, but evolving US regulation and clear policy frameworks are expected to attract sustained inflows. Over the long term, steady portfolio diversification into digital assets underpins a bullish outlook for BTC and ETH.