In a recent Q&A with Preqin, Chris Lipowicz, CEO of Elementus, discussed how hedge funds are navigating the rapid maturation of Bitcoin and digital assets. From the Elementus vantage point, the team is seeing institutional allocators shift from early exploration to more structured, data-driven engagement with digital asset markets. Read more below.

What’s the direction of travel regarding digital currencies and private markets?

There are three key indicators. Firstly, the ultimate absorption of Bitcoin by exchange-traded funds (ETFs) and digital asset treasury companies (DATCO). Secondly, the growth of stablecoins and the number of settlements transacted in them. Finally, treasury auctions via stablecoin companies like Tether and Circle expediting USD dominance on-chain.

Unpacking these in order: on Bitcoin ETFs – the fact you can gain exposure to Bitcoin like any other fund now is groundbreaking and helps create familiarity and eases operational friction.

On stablecoins – think of them as internet dollars that are pegged directly to the US dollar, used for settlement purposes across not only peer-to-peer or person-to-person but also international boundaries. This is infrastructure. Stablecoins are connecting banks, funds, and crypto rails all in one. In 2024, according to a Bitwise report, $14tn was settled through stablecoins, surpassing Visa for the first time.

Finally, T-bill auctions effectively make the US dollar a native on-chain settlement layer. Additionally, the tokenization of T-bills via yield-bearing stablecoins gives institutional investors a new outlet to generate yield. This innovation is backed by some of the biggest names in the asset management industry, and their involvement offers a clear signpost to the direction of travel here.

How have hedge funds reacted to the journey crypto has been on?

Some hedge funds have been more progressive than others in leaning into crypto. The market is more familiar to them than ever before. I’ll give a few reasons why: you have bank-style custodians, which add a layer of credibility. For hedge funds, the 24/7 market access (spot, lending, etc.) is attractive; you’re effectively trading all the time, which enables some of the classic hedge fund plays.

Alongside this, you have the future basis and the spreads that you can ultimately equate a nice alpha-gaining strategy around those capabilities. Some folks are looking, others aren’t yet. We find the biggest differentiator and greatest appeal lies in the asymmetry of information. In crypto, what happens on-chain is public, but it’s difficult to interpret without the right tools. That’s where Elementus comes in; where entity identification and transactional flows become intelligible.

Are more people getting interested?

Elementus is a blockchain intelligence platform focused on the flow of digital assets across an evolving ecosystem. Across our day-to-day operations, we’re working with hedge funds, major financial institutions, lenders – anyone working on the business side of the house – helping to gain a better understanding to make more informed decisions.

It’s about time-to-action and speed-to-know when decision time comes. Evaluating risk and staying hedged in real time requires knowing who’s on the field with you.

About
Chris Lipowicz, is CEO and President of Elementus, a blockchain data intelligence firm helping hedge funds, financial institutions, and legal services see exactly what’s happening on-chain.

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This article originally appeared in Hedge Funds Q3 2025: Preqin Quarterly Update.

_{This is a sponsored opinion by Elementus. The views expressed are provided as of November 2025, do not constitute an endorsement, recommendation, or any other advice, and are subject to change. The content does not necessarily reflect the views of BlackRock, Preqin, or any of its affiliates. Elementus is not affiliated with Preqin. Preqin received compensation from Elementus in exchange for publishing this content.}

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