Hedge funds amend mandates to allocate capital to digital assets
Sixty percent of hedge funds are now seeking to change investment mandates to allow trading in digital assets, signaling a shift from observation to active capital deployment. Industry leaders predict major financial institutions will launch pilot programs in late 2026, maturing into full-scale products by late 2027.
John DiAgostino, head of institutional strategy at Coinbase, reported that 60% of hedge funds are currently looking to amend their investment mandates to permit trading in digital assets. This development marks a transition from the "looky-loo" phase to actual risk capital deployment, as funds must obtain permission from investors to invest in new asset classes. DiAgostino, who serves on the board of the Alternative Investment Management Association (AIMA), was elected on a pro-AI, pro-crypto platform. He noted that funds have recognized they can extract alpha from this asset class and are actively changing their mandates to reflect this.
Teddy Fusaro, president of Bitwise, observed that while 2024 was defined by Bitcoin ETF adoption, the past year has seen professional investors and financial advisors seek exposure to a broader range of crypto assets, including the Chainlink ETF (CLNK). Fusaro predicts that in the remaining months of 2026 and early 2027, major financial institutions will announce limited pilot programs. These pilots are expected to mature into full-scale products by Q4 2027, where the underlying blockchain infrastructure will be invisible to end users. Industry leaders argue that institutional adoption is no longer dependent on a single catalyst but is driven by daily "micro-catalysts" and the gradual, necessary integration of blockchain into legacy financial workflows.