Sector in Focus: Digital assets

Digital assets, namely cryptocurrency, tokenized assets, NFTs and stablecoins, have reached a market cap of $2.50tn. Institutional engagement is at pivotal moment, after years of interest from both hedge funds and venture capital in different ways

• The blockchain vertical within venture capital has seen exceptional growth over the past decade, increasing from $6.3bn in December 2016 to $138bn in June 2025

• Regulatory shifts across major markets are offering the clarity required for institutional adoption, directly influencing deal flow and investment formation across VC and hedge funds

• Tokenization promises to enhance transparency and supporting liquidity through fractional ownership via digital tokens

• Cryptocurrency hedge funds remain a niche but increasingly sophisticated strategy. Despite high volatility, their strong risk-adjusted returns continue to attract institutions seeking differentiated exposure to digital assets