New global survey shows 55% of hedge funds now hold crypto, with more planning to increase
More than half of global hedge funds now hold crypto-related assets, marking a pivotal shift as digital assets move from the fringes to the mainstream of institutional investing, according to a new report by the Alternative Investment Management Association (AIMA) and PwC.
In 2025, 55 percent of hedge funds have exposure to crypto, up from 47 percent the previous year, with most maintaining modest allocations of less than 2 percent of their assets under management.
Notably, 71 percent of these funds plan to increase their exposure in the coming year, as reported by AIMA and PwC.
This surge in interest is closely linked to a more constructive global regulatory environment, particularly in the United States.
The report highlights that evolving US policy has encouraged nearly half of institutional investors to increase their digital asset allocations, while 57 percent of hedge funds already invested in crypto cite greater willingness to invest as a direct result of regulatory developments.
Improved access to banking services and expanding US operations are also noted as positive outcomes of the changing landscape.
Crypto derivatives have become the preferred vehicle for many hedge funds, with 67 percent investing through these instruments to gain exposure without holding the underlying assets.
However, the report cautions that such strategies can introduce market risks, referencing a flash crash in October that exposed vulnerabilities tied to excessive leverage and insufficient institutional-grade infrastructure.
Tokenisation is another trend gaining momentum, with over half of hedge funds expressing interest in regulated, tokenised products for liquidity management and collateral purposes.
The strongest enthusiasm for tokenisation is found among smaller managers and those employing macro strategies, particularly in Asia and the Middle East.
Family offices and high-net-worth individuals remain the primary investor base for crypto hedge funds, though participation from funds of funds is rising.
Despite the rapid adoption, the report notes that regulatory and tax uncertainty, as well as restrictive investment mandates, continue to deter half of traditional hedge funds from entering the crypto space.
Meanwhile, the hedge fund industry itself is experiencing unprecedented growth.
According to Hedge Fund Research (HFR), global assets under management reached a record US$5tn in the third quarter of 2025, fuelled by both new capital inflows and strong investment returns.
Equity-focused and macro hedge funds have been key beneficiaries, with the former seeing assets swell by US$96.7bn in the quarter.
As institutional confidence, regulatory clarity, and market infrastructure continue to evolve, the integration of digital assets into hedge fund portfolios appears set to accelerate, reshaping the landscape for wealth professionals and their clients.
