One in six CFOs surveyed said that cryptocurrencies are likely to make up at least 10% of their investment portfolio.
In the wake of the market boom this year, crypto has attracted many new investors, both private and institutional, and it looks like that trend will continue in hedge funds, a new report from the Intertrust Group shows.
The report, entitled “ The future hedge fund CFO: Preparing for disruptive tech and emerging asset forms,” provides the results of a survey commissioned earlier this year. The 100 respondents all had some form of CFO-related responsibility and an average of $ 7.3 billion in assets under management.
The survey showed that the expectations of hedge fund managers and their investors have evolved, driven by technological advances. Investors now want more frequent updates on their investments, with nearly half of hedge funds planning to respond to increased data demand by investing in distributed ledger capabilities.
CFOs will also focus more on digitization to improve operational efficiency, believing that AI and analytics have the greatest potential to revolutionize the industry. It is noteworthy that almost a third of those surveyed believe blockchain will be a game-changer for hedge funds.
It is noticeable that cryptocurrency appears to be almost universally accepted as an investment form and is attracting great interest. An incredible 98% of CFOs expect to be investing in crypto in the next five years, including all respondents from the UK, Europe, and North America.
It is expected that crypto will make up at least 10% of the investment portfolio in roughly every sixth hedge fund. The average that CFOs expect is 7.2%, with that number in North America being 10.6%.
Jonathan White, Global Head of Fund Sales at Intertrust Group, said,
“From an investor perspective, it is imperative that CFOs ensure that these controls are in place so that investors are comfortable. If one in six expects to invest more than 10% in cryptocurrencies, then one in six must be prepared for this investment.”
The report concludes with a detailed description of the rise in ESG concerns among investors, which could make Bitcoin a less attractive choice due to its high energy consumption. So, with more and more investors investing in cryptocurrencies in the coming years, the coins of the future could be the more energy-efficient options like Cardano, Stellar, and Algorand that now claim to be carbon negative.
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