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More crypto hedge funds are now using DeFi projects: PwC

Updated: Aug 31, 2024
Published: May 24, 2021
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A new report by PricewaterhouseCoopers (PwC) revealed that an increasing number of cryptocurrency hedge funds are using decentralized financial (DeFi) projects.

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Crypto hedge funds are warming up to DeFi platforms

Decentralized financial platforms are still small compared to their centralized counterparts. However, they have been gaining traction in the cryptocurrency space as more companies and individuals now prefer to deal with them.

According to PwC’s third annual Global Crypto Hedge Fund Report published earlier today, an increasing number of crypto hedge funds are now using DeFi projects. The reports revealed that cryptocurrency hedge funds had $3.8 billion in assets under management in 2020, up from $2 billion in 2019.

The report revealed that the crypto hedge funds are showing more appetite for decentralized financial projects. “Our data shows that 31% of crypto hedge funds use decentralised exchanges, with Uniswap being the most widely used (16%), followed by 1inch (8%) and SushiSwap (4%),” the report added. PwC stated that DeFi has been growing massively in recent months. “Last summer, DeFi started booming and, between April 2020 and April 2021, the trading volume on these platforms grew more than 90-fold, with Uniswap making up for half of the DeFi market volume in April 2021,” PwC added.

BTC and ETH lead the way

Cryptocurrency hedge funds are trading Bitcoin and Ether (ETH) more than other cryptocurrencies. According to the report, over 50% of all daily trading volume is BTC, with ETH coming a distant second. “We also asked funds to name their top traded altcoins by daily volume (stablecoins were excluded). We found that the top five were: Ethereum (ETH, 67%), Litecoin (LTC, 34%), Chainlink (LINK, 30%), Polkadot (DOT, 28%) and Aave (AAVE, 27%),” PwC added.

The DeFi space has been gaining traction in recent months as they are now providing some of the services offered by the traditional financial institutions.

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