- The crypto hedge funds volume of assets increasing every year.
- Chainlink, Polkadot, and AAVE are proven as the most popular assets.
- More traditional financial institutions already invested or thinking of investing in crypto.
The total volume of assets under the cryptocurrency hedge funds management increased from $1 billion to over $2 billion in 2019 and 3.8 billion in 2020. Moreover, according to analysts of the consulting company PricewaterhouseCoopers (PwC) and Alternative Investment Management Association (AIMA), the hedge funds’ interest in decentralized finance (DeFi) is growing.
Furthermore, the recently released Global Crypto Hedge Fund Report indicates that 31% of these funds utilize decentralized exchanges. Interestingly, Uniswap, 1inch, and SushiSwap are indicated as the most widely used assets.
Meanwhile, according to DeFi Pulse, the total value locked in Ethereum-based DeFi networks sits at $60 billion. At the same time, traditional hedge funds like Point72 are also showing interest in DeFi as part of setting up a crypto-focused funds strategy.
Some more traditional financial institutions are also interested in DeFi. PwC Crypto Leader Henri Arslanian said:
Whilst they may be still far from using decentralized applications, many financial institutions are trying to be more educated and try to understand the potential impact that DeFi may have on the future of financial services.
Notably, while the first digital asset, Bitcoin, is not the most popular crypto among funds, Ethereum’s ETH was included in 67% of investments. Also, crypto hedge funds are involved in crypto staking, lending, and borrowing.
Remarkably, the crypto hedge fund returned 128% in 2020 versus 30% in 2019. The majority of investors of such funds are high-net-worth individuals or family offices. Also, 47% of traditional hedge fund managers studied are already invested or thinking of investing in crypto.