- Over half of traditional hedge funds now hold crypto assets, marking a steady institutional shift.
- Tokenisation is gaining traction, with smaller and macro strategy managers showing the strongest interest.
- Evolving US and global regulations are driving greater confidence and increased allocations to digital assets.
A growing number of traditional hedge funds are entering the crypto market, signaling a steady institutional adoption of digital assets.
According to the 7th Annual Global Crypto Hedge Fund Report by the Alternative Investment Management Association and PwC, 55% of traditional hedge funds now hold some form of crypto exposure, up from 47% in 2024.
While most allocations remain modest, under 2% of total assets under management (AUM), 71% of hedge funds plan to increase their exposure over the next year.
The survey indicates a constructive global regulatory environment as a contributing factor. The funds already invested in digital assets identified the lack of regulation, growing interest, and banking accessibility as the main reasons for investment in digital assets.
In the hedge fundsβ case, 57% of these investment pools showed a higher willingness to invest because of regulations within the US, while 29% were motivated by a higher interest from investors.
Crypto-specific hedge funds showed a slightly lower percentage, as 47% showed a higher interest from investors, while 24% were influenced by regulatory guidance.
Family Offices Lead, Tokenisation Gains Momentum
Family offices and high-net-worth individuals are the primary investors in crypto hedge funds; however, funds of funds are increasingly participating. In addition to investment, hedge funds are looking into tokenized products as a means to manage liquidity, thereby evidencing a trend towards blockchain technology.
The research reveals 33% of hedge funds have tokenization on the agenda, with a strong interest in tokenization from the Asia-Pacific and Middle Eastern regions. More than half of those surveyed (52%) are interested in tokenized fund structures on the basis of operational efficiency.
Smaller managers, those below US$1b AUM, have a higher propensity to delve into tokenization than larger managers (37% vs. 24%), while macro strategy managers have the strongest interest at 67%.
It is expected that tokenized and traditional fund structures would co-exist in the next ten years, while 15% see tokenization as a possible dominant model.
Hedge Fund Crypto Exposure Surges in 2025
The latest developments in regulation have been identified as a determining factor in building confidence in digital assets, according to industry executives. The study has been referred to as a turning point, according to AIMA’s Managing Director, James Delaney, as digital assets are becoming mainstream rather than fringe investments.
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