Hedge funds plan to significantly increase their exposure to cryptocurrencies by 2026, a new survey shows, in a major vote of confidence for digital assets after recent large price falls and plans for punitive new capital rules. If replicated across the sector, that could equate to a total of about $312bn of assets in cryptos, based on data group Preqin’s forecast for the total size of the hedge fund industry, Intertrust estimated. Seventeen per cent of respondents expected to have more than 10 per cent in crypto. This would represent a large increase in appetite among hedge funds. Current holdings in the sector are unclear, but a number of big-name managers have already committed small amounts to crypto assets, attracted by soaring prices and market inefficiencies that they can arbitrage.

https://www.ft.com/content/4f8044bf-8f0f-46b4-9fb7-6d0eba723017