More than 50% of America's largest hedge funds are now investing in cryptocurrencies – and bitcoin in particular – a clear sign of increasing institutional adoption of the asset class, according to a report by The Street citing data from investment firm River.

River's analysis of the 25 largest US hedge funds found that over half have exposure to bitcoin, its many having gained exposure by purchasing bitcoin exchange-traded funds, which were introduced in the US in January.

Several prominent hedge funds, including Millennium Management, Mariner Investment Group, DE Shaw, Point72 Asset Management, Verition Fund Management, BlueCrest Capital Management, Elliot Investment Management and Sculptor Capital Management, have diversified their portfolios with bitcoin or bitcoin ETFs. Point72 Asset Management, for example, holds 1,089 bitcoin, while Schonfeld Strategic Advisors owns 6,734.

Millennium Management stands out with a nearly $2bn exposure to bitcoin.

Despite the trend, some major hedge funds remain cautious and have so far opted out of cryptocurrency investments, according to River, including Bridgewater Associates, AQR Capital Management and Balyasny Asset Management.