A recent survey indicates a growing trend among traditional hedge funds to embrace crypto assets, with a majority now holding some form of digital currency exposure. The survey, conducted by the Alternative Investment Management Association (AIMA) and PwC, reveals that 55% of global hedge funds have invested in crypto assets, a notable increase from 47% the previous year. The study encompassed 122 hedge fund managers, representing a total of $982 billion in assets.
The survey highlights a growing confidence in the digital asset market, spurred by supportive regulatory signals and rising cryptocurrency prices throughout 2025. Notably, Bitcoin's rally, fueled by the Trump administration's pro-crypto stance, has played a significant role in bolstering institutional confidence.
While the rise in hedge fund participation is evident, most funds maintain relatively modest exposure to crypto assets. The survey indicates that, on average, funds allocate 7% of their portfolios to crypto-related assets. However, over half of these funds invest less than 2% of their total assets in the sector.
Among hedge funds with crypto exposure, a significant portion, 67%, are primarily utilizing derivatives to invest. This approach enables them to speculate on price movements without directly holding digital tokens. However, the report also cautions that these instruments introduce market and leverage risks, referencing a "flash crash" in October that exposed vulnerabilities in crypto market infrastructure.
The survey suggests a continued upward trajectory, with funds already invested in crypto planning to increase their exposure over the next 12 months. This signals a growing conviction that regulatory clarity will foster deeper institutional adoption. James Delaney, managing director of asset management regulation at AIMA, noted that regulatory uncertainty has been a major barrier for most of these funds, and this year's report may mark a turning point in overcoming these challenges.
In addition to Bitcoin and Ethereum, Solana has seen a surge in popularity among crypto-focused funds, with 73% of the funds now holding it, a marked increase from 45% in 2024. Furthermore, spot trading has grown, rising to 40% from 25%. Approximately 52% of respondents are interested in tokenization, and 43% of traditional hedge funds plan to participate in DeFi over the next three years.
Despite the growing interest, some hedge funds remain hesitant to invest in crypto, citing lingering tax issues and investor mandate barriers. Around half of the surveyed funds with no current crypto exposure signaled no plans to enter the market in the near term. However, the report suggests that if these mandates and other barriers were removed, roughly half of those polled would consider investing.
