In recent crypto news, hedge funds moved closer to embracing tokenization in 2025, with 33% actively pursuing or exploring the technology for their fund units, according to the 7th Annual Global Crypto Hedge Fund Report released November 5 by AIMA and PwC.
The survey of 122 institutional investors and hedge fund managers representing nearly $1 trillion in assets under management found that 52% of respondents expressed interest in tokenized structures.
Managers cited broader investor access and operational efficiencies as the main drivers behind their exploration of on-chain fund units.
Crypto News: Real-World Assets Hit Record Valuation
In further crypto news, the increased institutional interest in tokenization coincided with the real-world asset (RWA) market reaching an all-time high of $35.8 billion on November 7, according to rwa.xyz data.
Tokenized money market funds accounted for a substantial portion of this growth, with a market capitalization of $8.7 billion.
BlackRock USD Institutional Digital Liquidity Fund (BUIDL) led the tokenized money market fund sector with $2.8 billion, followed by Circle USYC at $990 million and Franklin OnChain U.S. Government Money Fund at $844 million.
These three products significantly outpaced the remainder of the tokenized money market universe.
Smaller Managers Lead Adoption
The report revealed that smaller fund managers showed greater willingness to experiment with tokenization.
Sub-$1 billion AUM managers demonstrated 37% interest in tokenized structures, compared with 24% among their larger counterparts. Macro strategy managers displayed the highest interest at 67%.
Crypto-native hedge funds advanced further along the tokenization curve. Sixteen percent of respondents had already tokenized fund units or planned to do so within a year. At the same time, 8% had allocated to tokenized real-world assets, suggesting earlier adoption within the crypto-native sector.
Crypto News: Regulatory Hurdles Persist, But Infrastructure Gains Traction
Despite growing interest, legal and regulatory uncertainty remained the primary barrier to the broader rollout of tokenization.
Seventy-two percent of respondents cited legal uncertainty and limited investor demand as primary obstacles, alongside concerns about interoperability and system integration.
Regulatory challenges varied by region, with 44% of North American managers identifying regulatory uncertainty as their top barrier, compared with 28% in EMEA and 9% in APAC.
Nevertheless, hedge funds are increasingly utilizing regulated, tokenized money market funds and tokenized treasuries for liquidity management and collateral purposes.
Managers reported tangible benefits, including faster settlement, enhanced yield, and lower operational risk, even as the ecosystem continued to mature.
Traditional hedge funds cited legal and compliance services as the area in greatest need of improvement, with 40% of respondents flagging this concern.
Crypto hedge funds prioritized access to banking, legal, and compliance support, as well as custody infrastructure.
Crypto News: Armstrong Highlights 24/7 Trading Potential
Coinbase CEO Brian Armstrong highlighted the potential of tokenization to eliminate traditional market constraints in a statement on November 6, as per recent crypto news reports.
He stated:
Armstrong’s comments aligned with those of hedge fund managers regarding the operational advantages of tokenization, particularly in terms of settlement speed and market accessibility.
Looking ahead, 15% of surveyed managers expected tokenized hedge fund structures to become the industry standard within a decade.
The majority (55%) anticipated that tokenized and traditional formats would run in parallel. Only 13% believed tokenization would remain niche or specialized.
The report positioned tokenization as moving beyond conceptual pitch decks toward live implementations, anchored first in tokenized cash and fund units. The pace of broader adoption remained tied to regulatory clarity and demand from allocators.
Source: https://www.thecoinrepublic.com/2025/11/09/crypto-news-52-hedge-funds-eye-tokenization-rwa-market-hits-36-billion/
