Traditional hedge funds are accelerating their entry into the crypto market as the U.S. regulatory landscape turns more favorable under President Donald Trump’s administration.
According to a 2025 joint report by PwC and the Alternative Investment Management Association (AIMA), 55% of traditional hedge funds now hold digital assets, up from 47% in 2024 — marking a notable milestone for institutional adoption.
Regulatory Climate Spurs Confidence
Nearly half (47%) of institutional investors surveyed said they were motivated to increase crypto exposure due to recent pro-crypto policy moves from the Trump administration. These include the appointment of crypto-supportive regulatory officials and the signing of the GENIUS Act, which introduced clearer rules for managing stablecoins — digital tokens pegged to traditional currencies like the U.S. dollar.
James Delaney, Managing Director of Asset Management Regulation at AIMA, said that regulatory clarity has been a turning point:
“For years, uncertainty held back institutional entry. This year, we’re seeing many of those obstacles start to fade.”
The survey covered 122 global hedge funds and institutional investors managing close to $1 trillion in assets.
Bitcoin, Ether, and Solana Lead Institutional Holdings
Among crypto-focused funds — those with at least 50% of their portfolios in digital assets — Bitcoin remains the most common holding, followed closely by Ether and Solana. Notably, Solana’s adoption surged, with 73% of funds holding it in 2025 compared to 45% last year, underscoring growing confidence in alternative blockchain ecosystems.
On average, hedge funds have allocated 7% of their assets to crypto, up slightly from 6% in 2024. While most funds maintain smaller stakes, about 71% of respondents plan to expand exposure in the next 12 months.
New Entrants and Shifting Strategies
Several large investment houses are stepping deeper into digital assets:
- Brevan Howard Asset Management recently appointed a crypto specialist from Peter Thiel’s family office.
- Point72 Asset Management and Elliott Investment Management have reported positions in Bitcoin and Ethereum ETFs.
Use of crypto-linked ETFs rose to 33%, up from 25% in 2024, while crypto derivatives remained the most popular method of gaining exposure, used by 67% of respondents — an increase from 58% the prior year. Spot crypto trading participation also jumped from 25% to 40%, showing growing comfort with direct asset ownership.
Tokenization and DeFi on Institutional Radar
Beyond trading, a growing number of hedge funds are exploring tokenization, or the process of representing fund shares on blockchain networks. About 52% of surveyed firms expressed interest in using tokenized structures — a model already being explored by large asset managers such as BlackRock.
Interest in decentralized finance (DeFi) is also gaining traction. Roughly 43% of traditional hedge funds already active in crypto plan to increase or begin DeFi engagement within the next three years. Nearly one in three respondents believe DeFi will reshape traditional asset management models.
FOMO Meets Opportunity
Despite crypto’s notorious volatility, the combination of regulatory support, institutional infrastructure, and potential upside is proving irresistible. While some funds remain cautious, using crypto primarily for hedging or volatility plays, others view it as a core growth strategy.
With Wall Street increasingly blending traditional finance with blockchain innovation, 2025 could mark a defining year for crypto’s institutional mainstreaming.
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