Here's the thing. Crypto hedge funds have been having a rough time lately, but it looks like they might just be getting a helping hand. These funds, which have been struggling to get banking services, have faced discrimination from traditional banks. It's not just a passing trend; it's systemic.

The Survey Says...

A recent survey found that roughly 75% of crypto hedge funds have faced problems securing banking services in the past three years. That's a huge number when you think about it. And when you start digging into the specifics, it gets even more concerning. The Alternative Investment Management Association (AIMA) surveyed 160 crypto-focused hedge funds and found that about 120 of them had some kind of banking problem, which is a staggering number.

The problems listed were pretty common and included things like vague communications and banks closing accounts without explanation. When they did give a reason, it was often about not wanting to get involved with the crypto market, which is pretty wild when you consider that other sectors don’t seem to have these issues.

Crypto Execs Weigh In

Paul Grewal, Coinbase’s Chief Legal Officer, called it systemic discrimination, pointing out that companies in other sectors aren't treated this way. It’s a solid point. Matt Hougan, Chief Investment Officer at Bitwise, also chimed in, saying that it’s good to be able to talk about it openly, as many in the crypto community already knew about this issue.

What Change Could Come?

Now, here’s where it gets interesting. Experts are saying that things might change in a big way once President-elect Donald Trump takes office on January 20, 2025. The early signs are promising.

For starters, the SEC is getting a new Chair, Paul Atkins, who is pro-crypto. He'll be replacing Gary Gensler, who many in the crypto community are not sad to see go. On top of that, David Sacks, who’s been dubbed the Artificial Intelligence and Crypto Czar, has hinted that banks’ restrictive practices might be investigated.

What does that mean?

The Good and Bad

If a pro-crypto administration really takes shape, we might see clearer and more consistent regulatory guidelines. That could help crypto hedge funds navigate the murky waters of banking. With clearer regulations, banks may be more willing to work with crypto hedge funds.

But it’s not all sunshine and rainbows. A pro-crypto administration could also push banks to adopt risk-based approaches rather than blanket bans on crypto activities. That might help some funds, but it could also mean banks pick and choose who they’ll work with, leaving others high and dry.

There’s also the possibility of greater financial inclusion, which sounds great. But it could also mean more competition for the existing funds, and who knows how that would all shake out?

Alternatives Exist

For those crypto hedge funds that find themselves shut out of traditional banking, there are alternatives. SEBA Bank in Switzerland is one option. It’s a bank that’s built to cater to crypto, offering services like custody, trading, and even secured loans.

Crypto-friendly banks like Bankera and Ally Bank are also on the table. They offer services that allow clients to manage both fiat and cryptocurrencies.

The AIMA is calling for a better approach, asking for proportional risk management and regulatory clarity to help crypto funds gain access to banking services.

Yeah… it’s a mixed bag. The landscape is changing, and it’s hard to say what will happen next.