Traditional hedge funds are willing to increase their exposure to Bitcoin and other cryptocurrency markets in the next five years New findings.
Intertrust Global, an international trust and corporate management company, conducted a survey of the chief financial officers of 100 hedge funds around the world about their intent to purchase crypto assets. Approximately 98% of respondents stated that they expect that by 2026, their hedge funds will invest 7.2% of their assets in cryptocurrencies.
The survey found that if replicated across the industry, 7.2% of the investment in the cryptocurrency industry would be equivalent to approximately US$312 billion. At the same time, about 17% of CFOs surveyed admitted that their hedge funds can allocate 10% of their assets to cryptocurrencies such as Bitcoin (Bitcoin).
The results showed that Bitcoin corrected by more than 50% after rising from USD 3,858 in March 2020 to nearly USD 65,000 in April 2021, leading to speculation that it will further collapse due to its overvaluation.
Nonetheless, the flagship cryptocurrency held through technical support is approximately $30,000. Earlier this week, Rose back to above 40,000 USD.
Bitcoin price boom review
Most of Bitcoin’s gains come from anti-inflation rhetoric that prevailed after the global market crash caused by the coronavirus pandemic in March 2020.
Central banks around the world responded with unprecedented monetary support. The Federal Reserve introduced a near-zero loan interest rate policy and an asset purchase plan of $120B per month.
The central bank’s decision caused the yields of US government bonds to fall to historical lows.At the same time, trillions of dollars led by the White House has further accelerated the injection of liquidity into the economy Stimulate the value of aid, Which also pushed down the value of the U.S. dollar against the fiat currency of its main competitor.
Many investors turn to higher-risk safe-haven assets that are good for US stocks, gold, silver and Bitcoin. All in all, as the Federal Reserve continues to print money, Bitcoin’s bull market has performed best.
Many mainstream fund managers appear at the forefront of Bitcoin’s 2020 price increase.For example, billionaire investor Paul Tudor Jones – Hedge fund Tudor Investments – said last year that he holds a small amount of Bitcoin.Later, another legendary investor Stan Drucker Miller It was also revealed that he invested in benchmark cryptocurrencies to offset inflation risks.
Brevan Howard, a European hedge fund management company, SkyBridge Capital, a U.S. fund company, Fidelity Investment, And ARK Invest has also become some of the biggest Bitcoin supporters in traditional finance.
The Intertrust survey also showed that all executives surveyed in Europe, North America and the United Kingdom have at least 1% exposure to Bitcoin and similar cryptocurrencies. It further pointed out that the average exposure of North American hedge funds to cryptocurrencies may be 10.6%, while hedge funds in the UK and Europe are expected to be 6.8%.
Inflation knocks on the door
The US Department of Labor reported in its monthly report that the Intertrust survey was also conducted when the US inflation rate in May reached 5% for the first time since 1992. Consumer price index (CPI) report.
Many analysts, including Randall Kroszner, a professor at the University of Chicago Business School and former Fed governor, famous Rising inflation will cause the Fed to withdraw its expansionary policy to a certain extent. As the Federal Open Market Committee (FOMC) began its two-day meeting on Tuesday, speculation about “cutting” has increased.
But so far, most FOMC officials, including Federal Reserve Chairman Jerome Powell, have regarded the recent CPI spike as “temporary.”ANZ Economist Tom Kenny famous Therefore, the U.S. Central Bank will at least keep its policy unchanged until it sees an improvement in labor data.
At the same time, Paul Tudor Jones was in He was recently interviewed by CNBCAfter noticing that the Fed did not approve of the recent surge in inflation, he has increased his Bitcoin holdings from 1%-2% in 2020 to 5%. He pointed out:
“I like Bitcoin as a diversification of the portfolio. Suppose there were 5% gold, 5% Bitcoin, 5% cash, and 5% commodities. I don’t know how I would handle the remaining 80%. I I want to wait and see what the Fed will do.”