PwC has found that the Cayman Islands is the most popular jurisdiction for hedge funds (garnering 34% of the market). It's interesting that this so closely parallels SEC data in filed form ADVs around fund domiciles - according to the Division of Investment Management Analytics Office most recent report, 35% of private funds are Cayman domiciled.
In my view, this trend will continue. Sophisticated investors and managers will always want a stable, predictable, tax neutral jurisdiction for their fund domicile, and Cayman has the track record, infrastructure and regulation to facilitate this, bolstered by the recent introduction of the VASP Act.
Recent pricing action aside, the crypto space is becoming more institutionalised. "Around a fifth of Traditional Hedge Funds surveyed representing US$180 billion in AuM are currently investing in digital assets (21%)". "Around a quarter of Traditional Hedge Funds who are not yet investing in digital assets confirmed that they are in late-stage planning to invest this year or looking to invest (26%)".
Institutions entering, or increasing allocations to the space will stick with the jurisdiction they know and understand, especially given that its regulatory regime facilitates the crypto space so well.
The full report makes good reading!
Funds tend to be domiciled in the same jurisdictions as Traditional Hedge Funds, with the top three being the Cayman Islands (34%), the United States (33%) and Gibraltar (9%).