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- High net individuals are seen increasing their investments in crypto in their portfolios.
- JP Morgan starts issuing debt to cryptocurrencies centered companies.
- Most hedge funds use derivatives to invest in cryptocurrencies.
As the craze of cryptocurrencies sweeps across the world, it has been of a benevolent observation that many new investors want to get into the market spectrums. While many are still getting to know the workings around it, reportedly the asset class has increased their percentages of investment portfolios into crypto currencies.
Many luxury personalities and high net individuals have begun allocating a significant portion of their portfolios, especially Bitcoin after the crypto king breached its $67,000 mark.
According to an estimate, by the end of 2020, approximately $15 billion of institutional capital was designated for crypto markets. According to Price Water Coopers Annual Global Crypto Hedge Fund Report, there was an increment of 11% from 2020 of the hedge funds that held assets under management of more than $20Million. The number has reportedly increased to 46% from 35% way back in 2020.
The medium returns of crypto centric hedge funds increased to 128% from 98% back in 2020, while interestingly most made profits by going long on the tokens. Several analysts believe that such numbers will increase exponentially in time.
The legends of the banking system, JP Morgan have already gotten their hands on by issuing debt to several blockchain and crypto investment centric companies. Companies like Goldman Sachs also witnessed a rise in demand for cryptocurrencies from institutions consequently restarting its trading desk and providing aid to deal in futures of BTC.
Bitcoin remains the highest traded crypto asset at 92% while others like Ethereum, Litecoin followed with the trading percentages of 67% & 34% respectively. While most institutions refuse to directly hold the tokens, many hedge funds and investment companies preferred to trade in derivatives by popular companies like proshares listed on the exchanges. The short selling of the tokens have also drastically reduced from 48% to 28%.
The most hedge funds were reportedly from the United States, United Kingdom and Hong Kong while most of them were registered from Cayman Islands, United States and Gibraltar. While the market witnesses epic meme coin battles, alt coins getting more efficient and cost effective and major cryptocurrencies like Bitcoin keep discovering new peaks, the interest for such markets are soaring and is something expected to grow further.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
