Traditional Hedge Funds Increasingly Embrace Crypto Assets

More than half of traditional hedge funds now hold cryptocurrency assets, according to a joint report by the Alternative Investment Management Association (AIMA) and PwC. The 7th Annual Global Crypto Hedge Fund Survey reveals 55% of funds have exposure to digital assets, up from 47% in 2024. This 17% year-over-year increase signals growing institutional acceptance of cryptocurrencies.

While allocations remain conservative—over half of participating funds invest less than 2% of total assets in crypto—the trend points toward expansion. Seventy-one percent of crypto-exposed funds plan to increase their digital asset investments within the next year. Portfolio diversification drives nearly half of these allocations, followed by market-neutral alpha opportunities and asymmetric return potential.

Derivatives dominate hedge funds' crypto strategies, with 67% opting for synthetic exposure rather than direct asset ownership. This preference has grown significantly from 58% in 2024, reflecting institutional comfort with familiar financial instruments while navigating the digital asset space.