The Top 5 Countries With the Most Crypto Hedge Funds

21e6 Capital AG
6 min readMay 22, 2023

This article uses the 21e6 Crypto Fund Database as a basis to map out the current state of crypto funds in May 2023.
Authors: Jan Spörer, Maximilian Bruckner

#1: The leader in crypto hedge funds: United States of America

As we have observed in previous crypto fund reports, the United States leads the crypto fund list when measured by the number of crypto funds.

The US has a strong progressive investor base seeking to invest in crypto funds. However, we have recently observed US funds under pressure due to uncertainty around digital asset regulation in the US. Some crypto hedge funds have already ceased operations. It will be interesting to see if the U.S. moves down this ranking in the coming months as a result of the SEC’s recent activities. The closure of Silicon Valley Bank, Silvergate, and Signature leaves many crypto funds in the US without a reliable banking partner.

The US may very well lose its leadership position as a preferred digital asset fund domicile.

Figure 1: The most common crypto fund domiciles

#2: The Rising Star: Cayman Islands + British Virgin Islands

A notable position is also held by offshore “islands,” the Cayman Islands, and the British Virgin Islands, with 24% of crypto hedge funds domiciled there. We expect the Cayman Islands to strengthen their position after the USA became less crypto-friendly for some crypto hedge fund business models.

While the Cayman Islands enjoy a higher reputation among institutional investors than most other offshore locations, the reputation comes with downsides. First, the Cayman Islands are a more expensive fund domicile for crypto asset managers than BVI. Second, the beneficial owner disclosure in the Cayman Islands is not as liberal as in BVI.

In short, the Cayman Islands is a “premium choice” among offshore domiciles, with higher institutional acceptance, moderate disclosure requirements, and moderate costs.

In line with the non-crypto hedge funds, the British Virgin Islands (BVI) is significantly less popular as an offshore hedge fund location. Some investors consider BVI as a less stringent jurisdiction. Institutional investors may refrain from investing in BVI-domiciled funds. Furthermore, BVI’s coverage of service providers and talent trails the more mature infrastructure present in the Cayman Islands. To summarize the offshore crypto fund domicile comparison, BVI is the lower-cost alternative to the Cayman Islands, with sophisticated investors often preferring the Cayman Islands.

#3: Switzerland

Switzerland has a relatively progressive crypto regulation and a strong network of banks and other service providers. Switzerland also has a progressive regulatory framework for hedge funds and a moderately progressive crypto-related regulatory framework. The coverage of service providers and the crypto-friendliness of Switzerland’s banks is moderate.

The setup and maintenance of a crypto hedge fund in Switzerland may be more expensive than in offshore “island” locations.

#4: Liechtenstein

Liechtenstein adopted the Liechtenstein Blockchain Act early on and is regarded as even more crypto-friendly than Switzerland. Furthermore, onboarding European professional investors to a Liechtenstein-based fund may be easier than onboarding to island locations, given that European banks and brokers tend to prefer Liechtenstein as a trusted and compliant jurisdiction.

Similar to Switzerland, Liechtenstein, is definitely not a low-cost digital asset fund domicile.

#5: Germany and Australia

The next countries to follow as relevant crypto fund domiciles are Germany and Australia. Both of these countries have crypto-accommodative regulations.

Germany, however, is not a preferred hedge fund domicile in general. The tax transparency of other domiciles and the setup and maintenance costs for funds in Germany often do not make it the first choice for crypto asset managers. However, some crypto funds have emerged that are instead using the regulation to their advantage by employing fully licensed crypto custodians and capital management companies.

Australia has worked toward progressive crypto regulation as well, and some new and old crypto fund managers have set up shop there.

Crypto fund of funds

Crypto fund of funds are increasingly playing a role in the crypto markets as well. We have written about fund of funds in the distributed ledger technology space before in this article, and will soon follow up with an article that provides some insights about crypto fund of funds based on our database. Subscribe to our newsletter to find out when the new article comes out.


Please note that this analysis neither represents financial advice nor is it supposed to be understood or interpreted as solicitation to buy or sell any securities, coins, or tokens. Any opinions (which may be subject to change without notice) expressed in this article are the authors’ personal opinions. The authors do not guarantee, of any sort, the accuracy, or completeness of any information or analysis supplied.

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About 21e6

21e6 Capital is a Swiss investment advisor, connecting professional investors with optimal crypto investment products. 21e6 Capital has analyzed over 1,000 crypto funds across the world and condensed them into a selection that can yield crypto-exposure with minimized downside risk.

Backed by a highly experienced team of crypto and finance experts with in-depth knowledge in digital assets and DLT, 21e6 Capital created a unique quantamental strategy that is aimed at achieving crypto-like returns while minimizing risk and volatility to global equity levels.

The 21e6 Capital team builds upon strong academic roots with a track record of leading crypto asset and decentralized finance publications and research, ensuring state-of-the-art crypto investment solutions for financial industry professionals.


Jan Spörer is Due Diligence Manager at 21e6 and responsible for overseeing the content quality management of the 21e6 Crypto Fund Database.

Jan is involved with the selection of target funds for the 21e6 portfolio, and has talked to and analyzed the majority of the largest crypto funds in the industry. He has worked as a software developer at one of Germany’s major banks, has prior experience in the investment management industry, and is a Ph.D. researcher at the University of St. Gallen. Jan has implemented portfolio backtesting engines for for academic and for production purposes as a consultant for quantitative trading companies.

Reach out to Jan via for inquiries about the 21e6 Crypto Fund Database. You can follow Jan on Linkedin to stay up to date.

Maximilian Bruckner is Head of Marketing & Sales at 21e6 Capital AG. Prior to this, he was engaged as Executive Director of the International Token Standardization Association (ITSA) where he focused on research and classification of crypto assets according to the International Token Classification (ITC) framework. He was heavily involved in the creation of the world’s biggest token database for classification and identification data on tokens (TOKENBASE). Maximilian graduated from the Frankfurt School of Finance and Management and did academic research in close consultation with Prof. Dr. Philipp Sandner.

You can contact Maximilian via e-mail at to request more information on 21e6 Capital AG or ask any questions regarding this article. You can also follow Maximilian on LinkedIn to stay up to date.


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