Traditional players are trying to get a piece of the digital asset pool.
What seemed like a rare sector is now gaining popularity as the number of specializedcryptocurrencies has grown to over 300. The total assets under management went up 8% in the year. On June 9, the total market cap was $1.234 trillion, down from $1.623 trillion on the same day a year ago.
42% of traditional hedge funds are currently investing in digital assets, up from 22% a year ago, according to the report.
The search is for Alpha. John Garvey is the global financial services leader principal at PwC. How will you beat the benchmark? You have to try new things.
The report found that more than half of hedge funds have less than 1% of their assets under management in digital assets. Roughly 5% of hedge funds had high exposure to digital assets, with 20% to 50% of their assets invested in the space.
Two-thirds of all hedge funds surveyed currently invest in the space plan to deploy more capital into the market by the end of 2022, it said.
While there are hundreds of cryptocurrencies out there, hedge funds are looking at the two largest by market value. In an interesting twist, 19% of investors are invested in NFTs, a growing asset subsector that took thecryptocurrencies market by storm.
Garvey said that the majority of the surveys were done before the last major bear market and that people still view the asset class as further ahead of where it was.
Garvey said that it was proven to be a resilient asset class and that there would be another rebound. It is a rising asset class and people are getting more and more comfortable with it, so you will continue to see a growing interest level in it.
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