A decline in hedge funds in the cryptocurrency sector according to the latest turbulence, uncertainty about US regulations influenced investment decisions

A decline in hedge funds in the cryptocurrency sector according to the latest turbulence, uncertainty about US regulations influenced investment decisions

hedge funds withdraw from the cryptosecector due to turbulence

According to a survey recently carried out by PWC and the alternative investment management association (AIMA), traditional hedge funds have been obtained due to the latest turbulence in the crypto sector. The report showed that the proportion of hedge funds invested in crypto-assets decreased from 37% in 2022 to 29% this year.

The survey included 59 hedge funds with a common assets of $ 280 billion. Over 70% of these funds stated that their investment decisions were influenced by market events last year. A considerable number of hedge fund surveyed was concerned about the increasing uncertainty regarding the regulation of the crypto sector in the United States. This uncertainty could cause you to rethink your investments in this asset class as a whole.

The crypto industry experienced a major change when several prominent crypto companies, including the leading US stock exchange FTX, registered bankruptcy. This led to considerable losses for investors, since the token prices collapsed and various companies froze the withdrawals of their customers.

Although the Bitcoin course has gradually recovered this year, investors remain careful due to the increased regulatory measures of the US authorities. These measures aim at what you consider as a widespread culture of non -compliance with laws in the industry.

The report also showed defects in the basic processes in the field of digital assets, such as risk management. Allegations of misconduct on the part of the companies were also established. Jack Inglis, CEO of the Aima, commented on these problems and emphasized that the industry had to tackle it.

Traditional hedge funds, which stay away from trading in cryptocurrencies, led various reasons for deterrent, including the risk of reputation, the lack of clear guidelines of regulatory and tax authorities and unreliable data. More than half of the respondents who have not yet been invested in the cryptom market stated that they wanted to wait for further updates and regulations before considering participation.

Among the hedge funds that are already invested in cryptocurrencies, the majority focus on Bitcoin and Ethereum. The survey showed that 41% pursue a multi-strategy approach, followed by 29% with a systematic approach and 12% with macro or stock strategies.

Almost half of the Hedge funds that already deal with cryptocurrencies stated that it wants to increase their investments. However, crypto assets only make up 2% of the total managed assets of this hedge fund. Despite the departure of certain hedge funds from the crypto sector, there is still interest in the investment class, especially from Hedge funds that are already committed.