Trump’s Crypto-Friendly Policies Lure Hedge Funds Into Digital Assets

Wall Street’s big-money players are finally warming up to crypto—thanks to a political nudge.

Hedge funds, long skeptical of digital assets, are diving in as regulatory winds shift under Trump-era policies. No longer content with traditional markets, these institutional whales are chasing alpha in Bitcoin and altcoins.

The irony? The same suits who mocked ‘magic internet money’ now can’t resist the FOMO. Guess even hedgies need narratives when yields dry up elsewhere.

Hedge funds chase opportunity

Aside from regulations, many managers fear missing out on big profits, and this remains a factor that motivates the funds. They see crypto as risky but full of opportunities. On average, hedge funds allocated 7% of their assets to crypto, up from 6% last year. Over half commit less than 2%, but 71% plan to increase exposure within the next 12 months.

Bitcoin is still the top choice among crypto assets that hedge funds focus on, followed by Ether and Solana. Solana has gained popularity this year, held by 73% of funds compared to 45% in 2024. Major firms such as Brevan Howard, Point72, and Elliott Investment Management have also joined the trend and currently hold Bitcoin and ethereum through exchange-traded funds. About 33% of survey respondents said they used ETFs, up from 25% last year.

Crypto derivatives have become the most popular entry point, used by 67% of funds, followed by spot trading, up from 25% to 40%. Roughly 52% of respondents showed some level of interest in tokenization, and 43% have plans to extend their business into DeFi within three years.

Also Read: Bitcoin ETF Outflow Streak Continues As Price Faces Pressure