Crypto hedge funds expect digital assets will be up by the end of the year

Traditional hedge funds already invested in crypto intend to stick with their positions or potentially increase their exposure, the study found

article-image

Sergey Kohl/Shutterstock, modified by Blockworks

share

A majority of crypto-native hedge funds expect higher market capitalizations for digital assets by the end of 2023 compared to 2022, according to a PwC study released Thursday.

Bitcoin has demonstrated an upward trend since the end of last year, with an 85% year-to-date rally alongside recoveries in global equity indexes. The total crypto capitalization has jumped 50% in that time, from $828 million to $1.25 trillion, with bitcoin making up about half.

“Despite market volatility, a fall in digital asset prices and the collapse of a number of crypto businesses, investment in crypto assets is expected to remain strong in 2023,” John Garvey, global financial services leader at PwC US, said in the report.

The study separately found the percentage of traditional hedge funds investing in crypto assets declined from 37% last year to 29%, as the crypto landscape grappled with regulatory strife in the US.

Still, those hedge funds already invested in crypto assets intend to uphold or even increase their exposure, regardless of market volatility and regulatory challenges, it noted.

The report utilized data from two separate surveys, one involving 131 crypto-native hedge funds and the other gathering information from 59 traditional hedge funds.

Traditional funds more interested in tokenization than crypto-natives

Traditional hedge funds showed more interest in blockchain-powered assets and securities, with around 25% exploring tokenization. 

However, unlike last year when one in five traditional hedge funds invested in non-fungible tokens (NFTs), no hedge funds reported NFT investments this time.

Among the crypto hedge funds surveyed, market neutral strategies, designed to generate profits irrespective of market direction, remained the preferred choice.

Meanwhile, the usage of discretionary long-only strategies rose from 14% in the last survey to 19%, while more quantitative long-and-short styles fell from 25% to 18%.

In terms of response to regulatory enforcement, 12% of crypto hedge funds were found contemplating a shift from the US to jurisdictions that offer a more favorable environment for crypto.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates (8).png

Research

Meta-aggregators like Titan and Kamino Swap improve price execution for users, making the Solana swapping landscape more competitive. Jupiter has incorporated meta-aggregation features into its latest routing engine to keep users on its front end (own the user, own the flow). At large, teams are treating swaps as a commoditized complement, offering incredibly cheap or free swaps to own the end-user and increase demand for high-margin product offerings (multi-product DeFi). On another note, the divergence in the concentration of aggregator volume between DEXs suggests increased specialization at the DEX layer by asset type.

article-image

Many community banks and credit unions feel like they missed the fintech craze — and they don’t want to miss stablecoins

article-image

BlackRock COO Rob Goldstein noted that the firm had been looking into crypto since 2017

article-image

With the June FOMC meeting coming up, the Fed remains unlikely to cut interest rates. Is this the right move?

article-image

The crypto-optional shooter is expected to release on Steam in a few weeks

article-image

The new airdrop campaign reaches 50,000 users, setting the stage for Spark’s 10-year token distribution