The institutional shift toward digital assets continues, with a new survey revealing that a majority of traditional hedge funds now hold cryptocurrency exposure — and many plan to expand it further in the coming year.
According to a 2025 report by the Alternative Investment Management Association (AIMA), 55% of traditional hedge funds currently have exposure to crypto assets, up from 47% in 2024. The survey, which included 122 hedge fund managers managing nearly $982 billion in assets, highlights how institutional confidence in the sector is growing despite recent market volatility.
Rising Institutional Confidence in Crypto
The study found that on average, hedge funds now allocate 7% of their total portfolios to crypto-related assets. However, most funds still maintain modest exposure levels, typically investing under 2% of their holdings in digital assets.
What’s notable is the growing optimism across the sector — 71% of respondents plan to increase their crypto exposure within the next 12 months, a clear sign of expanding institutional participation.
AIMA’s report also noted that two-thirds (67%) of hedge funds access the crypto market primarily through derivatives, reducing direct exposure while capturing volatility-driven profits. Yet, the study cautioned that the recent flash crash revealed weaknesses in over-leveraged positions and gaps in institutional-grade infrastructure supporting derivatives trading.
Regulatory Clarity Drives Hedge Fund Expansion
Nearly half (47%) of hedge fund managers cited the evolving US regulatory landscape as a key reason for boosting their crypto allocations. The trend comes as the Trump administration implements a digital asset regulatory overhaul, with bipartisan efforts in the Senate to pass a comprehensive crypto market structure bill.
Regulatory clarity in the United States appears to be removing long-standing barriers to institutional adoption, encouraging hedge funds to diversify into crypto as a hedge against macroeconomic uncertainty.
Crypto Regulation Momentum Builds in Washington
Lawmakers continue to advance frameworks such as the GENIUS Act, aimed at establishing stablecoin payment standards and defining rules for spot crypto trading. With several legislative proposals progressing despite political tensions, analysts expect that regulatory confidence will fuel another wave of institutional inflows into digital assets in 2025.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.