A Follow-Up to PwC Crypto Hedge Fund Report

In our previous article, we started analyzing the 3rd Annual Global Crypto Hedge Fund Report. We have already explained the rise of crypto hedge funds, talked about an ever-growing global appetite for De-Fi, and introduced readers to the crypto forecast from Bloomberg experts (discover more here). Now, as promised, we will talk about speculation, a specific space for which can be found in the report. With that said, let’s get started!

Speculation

  • The document says that most managers think that digital gold will be worth between $50-100 thousand by the end of 2021. The capitalization will be approximately $3 trillion. Please note that they were surveyed before the May fall. We wonder what the answers would look like after?
  • The second part of the report is dedicated to traditional funds that do not work with magic Internet money or are just starting out on the road of crypto. Mostly these are funds that have more than a billion dollars of capital under their management. One fifth of them has already invested in virtual assets, and the share is 3% of the funds under management. Almost 90% of those who have already invested are ready to go beyond that in the future.
  • More than half of those surveyed decided to use digital cash to protect themselves from risks (57%). A third showed interest due to the new ecosystem, less than 20% turned to cryptocurrency as insurance against inflation.
  • Well, what's stopping those who do not have any BTC in the account? Regulatory uncertainty, reputational risk, lack of proper infrastructure, and non-core investments are to blame. Nevertheless, when solving these problems, exactly half of the respondents are ready to take a more active part in the virtual market.
  • It is worth noting that every fifth fund that has not previously interacted with decentralized digital money is considering working in this market. 

Of course, the new generation of money is still far from mainstream but holds great potential for the future (learn more in our early article).

Final Words

The PwC report is living proof that the big funds become less critical about the high-yielding alternative asset class and more interested in its advantages over fiat. According to the Bloomberg team, another confirmation of the demand for virtual coins is the growing capitalization of Tether. We remind you that the capitalization of the most widely integrated digital-to-fiat currency exceeded $60 billion in the late spring. Last May, the figure was estimated at $8 billion, so the indicator has increased almost seven times in just 12 months.

Despite criticism, ongoing debate, and persecution by regulators, the market cap growth of the timeless leader of the segment serves as a steady indicator of the expansion of the digital asset ecosystem. 

Hopefully, as the market matures, adequate regulation is developed, and infrastructure is built, the cryptocurrency will be able to become a classic stock asset. 

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