PwC hedge fund survey finds crypto remains viable despite recent market turmoil

cointelegraph.com:

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 continuing regulatory uncertainty in the United States and elsewhere, the report found a rather positive outlook among the funds.

Crypto-native hedge funds are “working towards achieving a new industry dynamic which centres around rebuilding confidence and making their needs heard,” and nearly all of them (93%) expect the market cap to rise over the year, the report found. The majority of them (53%) reported no exposure to FTX or the Terra Luna ecosystem.

imagine paying your crypto hf 2% comish on this performance per pwc 5th annual hf report pic.twitter.com/TJk1cf7CKw

Most of the funds performed better than the price of Bitcoin (BTC) in 2022. The report found:

More than half of the funds (54%) have operations in the U.S., but those funds did not respond differently from others to U.S. regulations, with 42% saying those regulations are not expected to impact them. The funds listed segregation of assets (75%), financial audits (62%) and an independent statement of reserve assets (60%) as requirements they would like to see for trading venues.

Tokenization seems not to have made a big splash in the sector. Only 15% of funds are considering investing in tokenized securities, and only 4% tokenize units in their own funds.

Related: Crypto custody market reached $448 billion in 2022: Report

The portion of traditional hedge funds that invest in crypto fell from 37% in 2022 to 29% in 2023. Of the funds still investing in crypto, 62% hold less than 5% of their assets under management in crypto and only 8%