Traditional hedge funds ramp up crypto exposure as Trump-era rules ease barriers

Traditional hedge funds are buying into crypto harder than ever, and it’s not because they’ve suddenly become true believers, it’s because Donald Trump gave them the regulatory green light they’ve been begging for.

According to a new report from the Alternative Investment Management Association and PwC, 55% of traditional hedge funds globally are now holding crypto, up from 47% just last year.

These funds collectively oversee nearly $1 trillion in assets, said the report.

The survey, conducted in the first half of 2025, makes it clear what’s changed. Trump appointed agency heads who don’t treat crypto like it’s radioactive. He also signed the GENIUS Act, a new law that sets fresh standards for stablecoin, which is exactly what fund managers have been demanding for years.

James Delaney, who runs regulatory strategy at AIMA, said, “For most of these funds, regulatory uncertainty has been a major barrier. This year, those barriers are starting to be removed. This year’s report maybe marks a turning point in terms of overcoming these barriers.”

Hedge funds increase exposure and diversify products

But this isn’t just about legal clarity. The fear of missing out is also doing its job. Nobody on Wall Street wants to be the idiot who skipped the one asset class that kept delivering massive, unpredictable gains.

That fear is pushing traditional hedge funds and specialized managers alike to increase their exposure. Some of these specialized funds already keep over 50% of their portfolios in crypto. Others, like BlockSpaceForce, launched new funds in 2025 to scoop up digital-asset treasury firms that got hammered during the last crypto drawdown.

Bitcoin is still the top name on fund balance sheets, but Solana made the biggest leap. It jumped from being held by 45% of funds in 2024 to 73% this year. Ethereum stays right behind Bitcoin, but Solana’s sudden rise is real.

On average, hedge funds now allocate 7% of their portfolios to crypto, up slightly from 6%. More than half still commit under 2%, but 71% of funds in the survey said they’re planning to go heavier over the next year.

Even the giants are rolling in. Brevan Howard Asset Management brought in a former exec from Peter Thiel’s family office to lead a crypto strategy team.

Steven Cohen’s Point72 Asset Management and Paul Singer’s Elliott Investment Management are both holding ETFs tied to Bitcoin and Ethereum. The number of hedge funds using crypto ETFs went up to 33% this year from 25% last year.

Derivatives lead the way while DeFi becomes a target

Not everyone getting in is betting on prices going up, as some funds opened crypto positions just to profit from price swings. Others are using a basis trade, buying ETFs while shorting futures to play the spread, without touching actual Bitcoin.

Alternative’s report showed that 67% of funds with crypto exposure are using derivatives to bet on price moves, up from 58% in 2024.

Spot crypto trading also grew, from 25% to 40%, meaning more firms are now buying and selling the actual coins.

52% of fund managers said they’re interested in offering access to their products through crypto networks, basically tokenizing funds, like what BlackRock already does with mutual funds. This idea of turning fund shares into tokens on a blockchain is catching on.

And there’s more brewing in DeFi. 43% of traditional hedge funds that are in crypto said they’re planning to either start or increase their activity in decentralized finance over the next three years. One-third believe DeFi could eventually disrupt their business completely.

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