More than half of traditional hedge funds, about 55%, have exposure to digital assets, showcasing a growing institutional interest in the cryptocurrency market. A survey by AIMA revealed that on average, these funds allocate 7% of their portfolios to crypto-related assets, with 71% planning to increase their exposure in the coming year.

US regulatory changes have triggered a buying spree among hedge funds, with nearly half citing evolving US regulations as a reason for increasing their allocation to digital assets. Recent developments in Washington, including changes to digital asset rules and ongoing Senate discussions on a crypto market structure bill, have influenced this trend.

Despite recent volatility, nearly two-thirds of hedge funds are investing in cryptocurrencies primarily through derivatives, highlighting the hedging strategies employed by these institutions. However, the report also cautions about vulnerabilities related to excessive leverage and a lack of institutional-grade infrastructure in the derivatives market.

Read more at Cointelegraph: Most Traditional Hedge Funds Now Have Exposure To Crypto: Survey