For years, digital assets were treated as a sideshow by the world’s most established hedge funds.
Key Takeaways:
- A growing number of hedge funds are moving into crypto as Trump’s policies reshape regulation.
- The share of traditional funds with crypto holdings jumped sharply this year, a new AIMA–PwC report shows.
- Institutional exposure now spans ETFs, derivatives, and tokenized strategies.
Now, under President Donald Trump’s administration, that’s rapidly changing. Clearer rules and friendlier leadership at key financial agencies have opened the door to the kind of institutional participation crypto advocates have long anticipated.
A new survey by the Alternative Investment Management Association and PwC highlights the shift: more than half of all traditional hedge funds now have exposure to cryptocurrencies, a dramatic leap from just a year ago. These managers collectively oversee close to $1 trillion, and many are finally giving digital assets a serious seat at the table.
Regulation Turns From Roadblock to Gateway
The defining catalyst, according to analysts, has been the regulatory reset in Washington. Trump’s signing of the GENIUS Act established clear ground rules for stablecoins and digital assets, replacing years of uncertainty with a more predictable framework.
“For a long time, regulation was the excuse. Now it’s the reason,” said one New York–based portfolio manager. The sentiment echoes throughout the report, which found that nearly half of institutional investors cited the friendlier policy environment as their reason for increasing exposure this year.
Hedge Funds Rethink Their Playbook
Not all of these firms are betting on crypto’s long-term rise. Some are exploiting volatility or arbitrage between spot and futures prices, while others are using exchange-traded funds tied to Bitcoin or Ethereum to diversify risk.
The AIMA–PwC data show that 33% of hedge funds now use crypto ETFs, up from 25% last year, while two-thirds rely on derivatives for exposure. Only a minority deal directly in spot markets, though that number has also grown steadily as on-ramps become more institutional in nature.
Even so, for many funds, crypto remains a small but strategic allocation — typically around 7% of total assets, according to the survey. Most expect to expand that slice in the coming year as digital assets continue to mature.
Bitcoin Still Rules, but Solana Gains Ground
When it comes to portfolio composition, the pecking order remains familiar. Bitcoin and Ethereum dominate holdings, but Solana has emerged as the year’s breakout favorite. The study found that 73% of crypto-focused funds now hold SOL, compared to just 45% a year earlier — a reflection of rising developer activity and renewed confidence in the network’s scalability.
Specialized funds like BlockSpaceForce, which launched this year to focus on digital-asset treasury companies, are also helping push the narrative beyond simple token speculation.
The DeFi and Tokenization Frontier
Beyond investing directly, many asset managers are exploring ways to integrate blockchain infrastructure into their own operations. More than half of the survey’s respondents expressed interest in tokenizing traditional funds, a trend already visible in pilots from major firms like BlackRock.
Meanwhile, 43% of hedge funds active in crypto said they intend to expand into decentralized finance (DeFi) platforms over the next three years. These platforms offer yield opportunities that traditional financial systems can’t easily replicate, and nearly one-third of participants believe DeFi could transform or even disrupt parts of their business.
Institutional FOMO Takes Hold
Volatility still unnerves many fund managers, but the fear of missing out on another exponential crypto rally is proving stronger than hesitation. As digital assets recover from recent drawdowns, many see the next stage of growth being driven not by retail investors, but by professional money managers with deep pockets and refined risk models.
What’s striking about this new wave of adoption is its pragmatism: few hedge funds are treating crypto as a revolution. Instead, they’re viewing it as another opportunity — one that fits neatly alongside equities, credit, and commodities.
Trump’s administration may have simply provided the spark, but institutional appetite is now self-sustaining. Crypto, once the outsider in global finance, has become a line item in the portfolios of Wall Street’s most established players.
The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
Source: https://coindoo.com/trumps-pro-crypto-policies-draw-hedge-funds-into-digital-assets/