Cryptocurrency adoption in traditional hedge funds is accelerating, with more than half of the funds holding digital assets despite recent market volatility. A new survey shows a significant increase in institutional crypto exposure, marking a trend toward gradually integrating blockchain-based assets into mainstream investment strategies. By 2025, over 55% of hedge funds will hold digital assets, up from 47% in 2024. Most hedge funds allocate an average of 7% of their assets to crypto-related holdings, typically below 2%, but many plan to increase their exposure. Two-thirds of funds primarily invest through derivatives rather than direct holdings, raising concerns about vulnerabilities exposed during recent market turbulence. Regulatory developments in the U.S. have prompted nearly half of hedge funds to increase their crypto allocations amid ongoing legislative discussions. As institutional interest in cryptocurrencies continues to grow, traditional hedge funds are gradually incorporating digital assets into their portfolios. According to a recent survey by the Alternative Investment Management Association (AIMA), 55% of hedge funds plan to or already hold digital assets—up from 47% last year. The survey covered 122 hedge fund managers managing billions of dollars, indicating that blockchain investments are increasingly being accepted by mainstream investors. Traditional hedge funds are investing in cryptocurrencies and planning to increase their exposure. Source: AIMA On average, hedge funds allocate about 7% of their assets to crypto-related holdings, though most maintain lower exposures, with investment proportions often below 2%. Despite a cautious stance, 71% of funds intend to increase their crypto holdings over the next year. Interestingly, nearly two-thirds (67%) of funds choose to gain exposure through derivatives rather than direct investments, a strategy that has come under scrutiny following recent flash crashes, which exposed risks associated with high leverage and underdeveloped institutional infrastructure.