Hedge-fund investments in digital assets have reached its highest point on record, marking the fastest year-over-year expansion in the seven-year history of PwC’s Global Crypto Hedge Fund Report.
The share of traditional hedge funds with exposure to crypto climbed to 55% in 2025, up from 47% the year before, a 17% annual increase that signals a structural shift in institutional willingness to hold digital assets, according to a report released Saturday.
The growth appears far from over.
71% of traditional hedge funds with crypto exposure say they plan to increase allocations over the next 12 months, suggesting that institutional adoption is now moving on a predictable trajectory rather than speculative cycles.
Regulatory Clarity Drives Participation
A key driver behind the expansion is the change in the U.S. regulatory landscape, which the report identifies as a turning point for professional allocators.
57% of traditional hedge funds with crypto exposure say they are now more willing to invest because of clearer rules, including the SEC’s Project Crypto, OCC Interpretive Letter 1183, and Congressional progress on the GENIUS Act.
This is the first time the annual report shows regulatory clarity functioning as a catalyst for institutional inflows, reversing years of hesitation tied to enforcement actions and operational uncertainty.
Also Read: Did Solana’s Top Lending Platform Mislead Users? Jupiter’s Risk Reversal Sparks Alarm
Tokenization And DeFi Move From Theory To Planning
The report also shows hedge funds preparing for the next phase of digital-asset market structure.
52% are exploring tokenized fund structures, and 15% believe tokenization may become the industry standard within the next decade.
On the strategy side, 43% of traditional hedge funds expect to increase their DeFi exposure within three years, while nearly one-third believe decentralized finance could materially reshape future hedge-fund operations.
Institutional Allocators Signal A Second Wave
Much of the next growth phase appears dependent on the maturing of market infrastructure.
41% of institutional investors told researchers they would increase crypto allocations once custody, legal frameworks, and trading systems improve.
That suggests a second wave of institutional capital may not hinge on sentiment but on the industry’s ability to deliver the operational standards required by large allocators.
A Cycle Defined By Institutions, Not Retail
The findings point to a notable shift.
The industry's next expansion may be shaped less by retail speculation and more by institutions building long-term exposure.
With hedge funds marking their highest participation levels to date and the majority signaling further increases, digital assets appear to be entering their first sustained period of professionally driven adoption.
Read Next: Trump Calls Peter Schiff A 'Loser' And 'Jerk,' Economist Fires Back With Debate Challenge
