PwC Hedge Fund Survey Shows Crypto Remains Viable Despite Recent Market Turmoil

PwC released its fifth annual Global Crypto Hedge Fund Report on July 12, based on surveys of crypto-native and traditional hedge funds conducted in the first quarter of 2023. Against the backdrop of the recent crypto winter and ongoing regulatory uncertainty in the United States and elsewhere. The report found a very positive outlook among funds.

The report states that crypto-native hedge funds are “working toward driving a new industry dynamic focused on rebuilding trust and listening to their needs” and that almost all of them (93%) expect It is expected that the market cap will increase throughout the year. found, Most of them (53%) reported no exposure to FTX or the Terra Luna ecosystem.

Imagine paying your crypto HF 2% on this performance

Per PwC 5th Annual HF Report pic.twitter.com/TJk1cf7CKw

— Monty (@MontyHall_) 12 July 2023

Most funds outperformed bitcoin (BTC) price in 2022. The report found:

“Crypto hedge funds continue to be a popular investment vehicle for investors seeking exposure to the crypto-asset market.”

More than half of funds (54%) have operations in the US, but those funds did not react differently to US regulations, with 42% saying they do not expect those regulations to affect them. Funds listed asset segregation (75%), financial audits (62%) and an independent statement of reserve assets (60%) as requirements they would like to see for trading venues.

Tokenization doesn’t seem to have created a big stir in this area. Only 15% of funds are considering investing in tokenized securities, and only 4% of funds are considering tokenized units in their funds.

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The share of traditional hedge funds investing in crypto is set to drop from 37% in 2022 to 29% in 2023. Of the funds still investing in crypto, 62% have less than 5% of their assets under management in crypto and only 8% have more. Over 20% in crypto. Forty-six percent of those respondents said they would increase crypto investment this year, down from 67% last year. None of them said that they would reduce their capital level deployed in crypto.

Among funds not investing in crypto, “customer backlash or reputation risk” has overtaken “regulatory uncertainty” as the main reason, but 40% said the removal of regulatory barriers would encourage them to start investing in crypto. Will not be motivated.

PwC partnered with alternative asset manager CoinShares to survey 131 crypto-native funds. The Alternative Investment Management Association obtained data from 59 traditional hedge funds for that section.

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