Hedge Funds Add $400 Billion in Q2, Raising Concerns Over Bitcoin Spillover

Newly released Federal Reserve data show that domestic hedge funds increased their gross balance sheets during the second quarter of this year, months before the central bank's September rate decision.

The potential risk to Bitcoin is indirect. A policy surprise could raise funding or collateral demands across leveraged portfolios, forcing funds to find cash in liquid markets.

Gross asset value was $2.7857 trillion in the first quarter of this year and reached $3.1859 trillion in the second quarter, a $400 billion increase.

The Fed's data defines gross asset value as total assets, not gross notional exposure.