More than half of hedge funds invested in crypto, global survey says

Core Insights - Global hedge funds are increasingly investing in crypto markets, with over half now holding crypto-related assets, driven by the U.S. government's supportive stance on digital assets [1][2] Group 1: Hedge Fund Investment Trends - 55% of hedge funds hold crypto-related assets, up from 47% the previous year, with an average allocation of 7% of their holdings to crypto [2] - More than half of the hedge funds with crypto investments allocate less than 2% of their total assets to this sector [2] - An influx of new capital has led hedge fund assets to reach nearly $5 trillion in Q3 2025 [5] Group 2: Market Dynamics and Regulatory Environment - Cryptocurrency prices have surged in 2025, with Bitcoin reaching record highs, influenced by U.S. President Donald Trump's support and favorable regulations [3] - The past year has been pivotal for U.S. crypto regulation, with expectations for long-term regulatory stability [4] - 67% of funds invested in crypto plan to increase their investments in the next 12 months, primarily through crypto derivatives [4] Group 3: Risks and Challenges - The use of crypto derivatives, which allow funds to speculate on price movements without holding the underlying assets, introduces market risks [4] - A flash crash in October highlighted vulnerabilities related to excessive leverage and inadequate institutional infrastructure [5] - The funds surveyed manage approximately $982 billion in assets [5]