Hedge funds are significantly increasing their exposure to cryptocurrencies, motivated by a more favorable regulatory environment. According to a recent survey from the Alternative Investment Management Association and PwC, reported by Bloomberg, 55% of traditional hedge funds are now diversifying into crypto assets, a rise from 47% in 2024. This increasing institutional interest has been bolstered by new regulatory measures in the U.S., such as the recently passed GENIUS Act aimed at stabilizing the stablecoin market. Among the assets gaining traction are bitcoin, ether, and solana, with prominent asset managers like Point72 Asset Management and Elliott Investment Management revealing their holdings in crypto ETFs.
This institutional shift is further highlighted by JPMorgan’s bullish forecast, predicting a dramatic rise in bitcoin’s price to around $170,000. The bank’s analysts believe that a recent reset in market leverage presents a strong potential for significant gains for the cryptocurrency, particularly when comparing its volatility to gold. Similarly, analysts at Standard Chartered have referred to bitcoin as the “apex asset,” emphasizing its critical role in the decentralized finance ecosystem.
In parallel, the tokenization of traditional assets is gaining momentum. Tether’s tokenization division has partnered with ETF issuer KraneShares and Bitfinex Securities to create new tokenized financial products. KraneShares’ CEO, Jonathan Krane, anticipates that the firm’s business will be entirely tokenized within the next few years. Additionally, SBI Digital Markets, part of Japan’s SBI Group, is enhancing its collaboration with Chainlink to utilize their Cross-Chain Interoperability Protocol for its digital asset platform. Tokenization efforts are also echoed by Securitize and VanEck with their tokenized U.S. Treasury fund, VBILL, set to launch on Aave’s institutional DeFi platform integrated with Chainlink’s oracle technology for pricing data.
In another development, Chinese automotive company Cango, which transitioned to bitcoin mining last year, is seeking to expand its operations by combining its mining activities with high-performance computing in artificial intelligence. The firm also announced plans for a direct listing on the New York Stock Exchange, anticipated to occur on November 17.
Coinbase is currently at odds with banking institutions concerning new rules on stablecoin interest payments. The exchange has requested the U.S. Treasury to confine the ban on interest to stablecoin issuers alone, allowing other entities, like crypto exchanges, to offer yields on stablecoin holdings. However, a coalition of traditional banks, spearheaded by the Bank Policy Institute, is advocating for a comprehensive ban on yield-bearing stablecoins, asserting that such practices might lead to destabilizing capital outflows from conventional banking systems.
On the product front, cryptocurrency wallet manufacturer Tangem is set to launch Tangem Pay, a non-custodial virtual Visa card, in late November. This card will enable users to spend USDC stablecoins from the Polygon network at any location that accepts Visa, including platforms like Apple Pay and Google Pay.
As of the latest data, bitcoin is trading at approximately $101,073.59, while ether is available at around $3,288.11, reflecting the ongoing dynamic nature of the cryptocurrency market.
