EY, one of the world’s top four advisory and accounting firms, has found that one in four hedge funds expects to increase their crypto exposure for the next year. The 2021 EY Global Alternative Fund Survey describes alternative fund managers slowly taking a stable place in investor portfolios, with digital assets present, albeit on a small scale.
EY survey shows hedge funds are hungry for crypto exposure
The 2021 Global Alternative Fund Survey, a survey compiled by EY, one of the big four, shows the performance and popularity of alternative fund managers with investors over the year. The survey found that hedge funds are one of the most open platforms to incorporate crypto assets into their structures. According to the survey, one in four is studying hedge funds to increase their exposure to cryptocurrencies over the next year.
The coronavirus pandemic had an interesting year for investors with many challenges and navigating through it presented a great opportunity for alternative fund managers. However, cryptocurrency is currently not popular with a lion’s share of these fund managers, with only one in ten reporting exposure to these assets, showing that there is room for growth. In any case, these funds showed an impressive performance. 51 percent of the investors surveyed stated that they had increased the value of these alternative investments, met or exceeded their expectations.
Digital assets as alternative investments
The rise of digital assets (cryptocurrencies) as a major asset class has led companies and fund managers to view them as relatively profitable products in today’s confusing markets. While their actual stakes in cryptocurrencies have not been as large as other unregulated assets, they are starting to carve out a niche for themselves in this space.
This growth was achieved against the background of an unstable current situation in traditional investments, in which investors want to conquer new markets with new strategies. The survey is based on interviews with 210 managers and 54 investors and offers a glimpse into the future of alternative investments and how cryptocurrencies could be a big part of it.
On the importance of the decisions made this year of crossroads, Natalie Deak Jaros, co-head of the EY Global Hedge Fund said:
This study highlights the resilience of our industry and the key transformations that managers and investors are jointly influencing. 2021 was a year the industry invested in building significant momentum through various initiatives that will pay off for years to come.
What do you think of the fourth hedge fund looking to increase exposure to cryptocurrencies next year? Let us know in the comments section below.
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