Hedge funds significantly increased their exposure to cryptocurrencies during 2025. This increase responds directly to the Trump-era regulatory push, according to recent coverage data. The new legal clarity has reduced uncertainty for large institutional managers.
Data reveals that 55% of hedge funds now have crypto exposure. This figure represents a notable jump from 47% in 2024 and 29% in 2023. Furthermore, 47% of those surveyed attributed this growth to the current regulatory environment. Asset management giants like Israel Englander, Alan Howard, and Ken Griffin have integrated Bitcoin. They are doing so mainly through regulated ETFs like the iShares Bitcoin Trust (IBIT). Englander’s reported position, for example, reached 21.4 million IBIT shares, valued at $1.31 billion.
The key catalyst was legislation. The GENIUS Act, signed in July 2025, established clear rules for stablecoins. It requires 100% reserve backing and mandatory monthly disclosures. Separately, in March 2025, the creation of a Strategic Bitcoin Reserve was authorized. This reserve is funded by seized assets, which exceed 130,000 BTC. These measures transformed the perception of institutional risk.
Is this regulatory clarity enough to sustain institutional interest?
The immediate effect is increased demand for regulated vehicles. This includes both ETFs and stablecoins that comply with the new law. This capital flow can increase liquidity and depth in the spot markets. For managers, this reduces the risk premium previously paid for legal uncertainty. However, tensions remain, such as the historically inverse relationship between Bitcoin and the strengthening Dollar Index (DXY).
The Trump-era regulatory push has opened the door for big capital. Nonetheless, the market is closely watching several factors. The concentration of capital in specific ETFs like IBIT is a point of focus. So are criticisms from legislators about potential conflicts of interest in the law. The implementation of the GENIUS Act and the management of the Bitcoin Reserve will determine the sustainability of this new institutional trend.
