June 16, 2021

Report: Hedge Funds See 7.2% of Assets in Crypto by 2026

Friends, more recently we analyzed the third annual PwC crypto hedge fund report (all the details are waiting for you here). Today we will try to look into the future with a new survey by Intertrust. With that said, let's get started!

A Little Background

Despite the fact that many people still associate cryptocurrency with something illegal, 2020 was a blow-out year for bitcoin in terms of institutional adoption. The coronavirus pandemic that suddenly paralyzed the world's economy has enhanced the attractiveness of virtual coins compared to most traditional investment instruments. What is more, digital gold gained the status of a defensive asset due to the national currency's weakness. Central banks, flooding the world with cheap money, could not but trigger a reaction from people. As a result, investors have increasingly begun to pay attention to decentralized digital money.

While some still have doubts whether they should buy or increase their crypto holdings, others have already done so. Perhaps it all started with Tudor Jones. In the midst of a global pandemic, he was one of the first large investors to purchase bitcoins as a hedge against inflation. Jones also mentioned the fact that BTC reminds him of the role of gold in the 1970s.

So, Let's See How Things Are Going Now

Hedge funds intend to significantly increase their shares in virtual currency in the future. This has only come to light in recent days through Intertrust. Despite the fact that financial partnerships have been looking closely at the crypto market long enough, they plan to hold about $312 billion in digital assets by 2026. More than 100 CFOs around the globe participated in the survey. If all goes well, in five years or so, they plan to keep more than 7% of assets in crypto. Special attention to the magic Internet money is paid by North America. On average, it is going to invest about 10.8%.

The results confirm the growing interest and recognition of digital money as a new investment class. We are now confident that some positive movement is detectable in the area of crypto and the trend is likely to continue (find out why more and more young people are turning to cryptocurrency here). This report is the most shining example of the changing perceptions and increasing public awareness of the high-yield alternative class in the eyes of cautious pooled investment funds.

Bottom Line

Of course, the mass adoption of digital cash and the convergence of the new industry with traditional financial structures is a long, drawn-out process. Many conservative market participants are still concerned about the volatility of cryptocurrencies, exchange hacks, vulnerabilities of decentralized applications, and the existing legal uncertainty. But let's hope that the optimistic forecasts will come true in the next five years. After all, with the arrival of large investors, bitcoin can undergo a period of rapid growth again.

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