Bitcoin in a Post-Trump World Worries Hedge Fund Executives

Amid speculation over the future of Bitcoin post-Trump, hedge fund exec Eric Semler reiterates confidence in the cryptocurrency. Despite skepticism from some peers, he views negativity as an investment opportunity. Semler has announced plans to grow his company’s Bitcoin holdings significantly. Surveys show a rising trend of hedge funds considering cryptocurrency exposure.

Hedge fund executives are increasingly expressing skepticism about Bitcoin’s future as speculation mounts over the political landscape following the Trump administration. Eric Semler, chairman of Semler Scientific Inc., noted his peers see Bitcoin as a fleeting trend. In a recent interview with Coin Stories, Semler candidly shared, “I think that they think it is a fly-by-night concept and that it is probably going to, after the Trump administration, go back down a lot.”

Semler isn’t deterred by this outlook. Having founded his hedge fund TCS Capital Management, he believes strongly in Bitcoin as a long-term investment. His confidence comes amid wider industry concern that the political backing for cryptocurrencies may dissipate once President Trump leaves office. Although Trump did endorse a Bitcoin Strategic Reserve, figures like Samson Mow, founder of JAN3, express worries about future support under a different administration.

Despite those worries, Semler continues to double down on Bitcoin. In May 2024, Semler Scientific became the second US publicly traded company to implement a Bitcoin treasury strategy. Recently, the company revealed a plan to dramatically boost its holdings of Bitcoin, targeting an increase from 4,449 to an astonishing 105,000 in just two-and-a-half years. Semler also aims to secure 10,000 Bitcoin by the end of this year.

For Semler, the hesitancy from traditional investors signals a robust opportunity. He elaborated, “When you’re making a bet on something that the majority doesn’t believe in, and you’re right, you make so much more money.” He prides himself on an unconventional approach; his strongest investments often stem from being the lone voice against prevailing trends.

“I love the negativity; I’m a contrarian investor,” Semler asserted, underlining his belief that the most rewarding ventures often lie where others see no value. This contrarian sentiment is pivotal regarding hedge funds and their growing interest in Bitcoin.

A survey conducted by the Alternative Investment Management Association and PwC in October 2024 has shed light on this trend. Approximately 47% of hedge fund managers involved in traditional markets reported having some exposure to cryptocurrencies, showcasing a significant rise from just 29% in 2023. The year prior, in 2022, around 37% of respondents indicated they held cryptocurrencies.

Further emphasizing this evolution, a 2021 Intertrust Global survey found that 98% of CFOs from 100 hedge funds anticipated that their firms would invest about 7.2% of their assets in cryptocurrencies by 2026. It’s clear that the hedge fund landscape is shifting, albeit slowly, with increased interest in the emerging crypto market.