The assets under management (AUM) of crypto hedge funds rose in 2020 from $2 billion to $3.8 billion, and DeFi protocol tokens were widely distributed across portfolios. This is according to a PwC report.<\/p>\n
According to the study, Chainlink was held by 30% of funds, Aave by 28%. For comparison: Ethereum was held by 67%, Bitcoin by 97%.<\/p>\n
\n\u201cAlthough funds may still be far from using decentralized applications, they are trying to understand the potential impact that DeFi could have on the future of financial services,\u201d<\/em> said PwC Global Crypto head Henri Arslanian.<\/p>\n<\/blockquote>\n
31% of crypto funds used non-custodial platforms<\/a>, such as Uniswap (16%), 1Inch (8%) and SushiSwap (4%).<\/p>\n
42% earned from staking<\/a>, 33% from crypto lending operations, 24% raised debt financing.<\/p>\n
56% of the sampled structures trade derivatives, but only 28% use short positions.<\/p>\n
The average fund return for 2020 stood at 128%, up from 30% in 2019.<\/p>\n
The median AUM for the year rose from $3.8 million to $15 million. The client base of the structures comprises high-net-worth individuals (54%) or family offices (30%), with a median investment size of $400,000.<\/p>\n
The PwC study was conducted with Elwood Asset Management and the Alternative Investment Management Association. The consultancy believes the latter\u2019s involvement could popularise cryptocurrencies among traditional asset managers.<\/p>\n
The report states that 21% of \u201cclassic\u201d hedge funds with $180 billion AUM have already invested in the new class of instruments, on average 3% of assets, with 85% of them planning to grow this share. 26% do not rule out adding cryptocurrencies in the future.<\/p>\n
Regulatory uncertainty as a barrier to investing in digital assets was mentioned by 82% of hedge fund managers. For 77%, potential negative client reaction and reputational risk are the problem, and 64% reported a lack of the necessary knowledge.<\/p>\n
Blockstream acquired<\/a> the Adamant Capital cryptocurrency fund, founded by Bitcoin maximalist Tuur Demeester.<\/p>\n