Digital asset investments rise as regulatory clarity and ETFs boost confidence: Nearly half (47%) of traditional hedge funds surveyed this year have exposure to digital assets, up from 29% in 2023 and 37% in 2022.
More sophisticated investment strategies, shifting to derivatives: There has been a notable shift towards derivative trading in digital assets by traditional hedge funds, with its use rising to 58% in 2024 (up from 38% in 2023). This signals growing sophistication in hedge fund strategies.
Growing interest in tokenization despite regulatory challenges: Interest in fund tokenization is also growing, with 33% of hedge fund respondents either committed to or exploring tokenization, compared to around a quarter of traditional hedge funds last year.
Rising institutional client demand: 43% of traditional hedge funds—whether invested or not in digital assets—are seeing increased interest from institutional clients. Currently, family offices and high-net-worth individuals (HNWIs) remain the largest investor categories in digital asset focused hedge funds, followed by fund of funds.
Hedge fund sector remains cautious: Despite the industry’s growth, many traditional hedge fund managers remain hesitant, with 76% of those not currently invested in digital assets unlikely to enter the space within the next three years, up from 54% in 2023.
