Alternative investors are slowly coming around to the idea of investing in cryptocurrencies, according to a new study done recently by accounting firm Ernst & Young.
Thirty-one percent of hedge fund managers, 24% of alternative investors, and 13% of private equity managers said they plan to add cryptocurrencies to their portfolios in the next two years.
According to the study, managers of the largest firms - hedge funds overseeing more than $10 billion - are likely planning to enter the cryptocurrency market.
Another survey, Global Alternative Funds, conducted between July and September 2021 and conducted by Greenwich Associates, interviewed 264 alternative institutional investors also came to the same result. Although the number of people interviewed is small, they represent funds totaling nearly $5 trillion.
Among the concerns of these alternative fund managers the biggest one is related to cybersecurity and the availability of institutional-grade custody solutions. These demands have slowly been met by the market, with improvements and controls that include multi-signature transaction approvals, and the ability to generate detailed audits to the satisfaction of regulators.