On May 24, a new report by PricewaterhouseCoopers (PwC) and the Alternative Investment Management Association (AIMA) showed that crypto hedge funds managed nearly US$3.8 billion in assets in 2020, higher than the US$2 billion in 2019, and Crypto hedge funds have shown interest in decentralized finance (DeFi).

The third annual global crypto hedge fund report released by Elwood Asset Management shows that 31% of crypto hedge funds use a decentralized exchange platform (DEX), of which Uniswap is the most widely used (16%), followed by 1inch (8%) ) And SushiSwap (4%).

According to data from DeFi Pulse, the DeFi space has exploded in recent months, and the total value of the Ethereum-based DeFi platform currently reaches 60 billion U.S. dollars. There are reports that some large traditional hedge funds, such as Steven Cohen’s Point72, are interested in DeFi as part of the strategy of establishing crypto funds.

Henri Arslanian, head of PwC’s encryption business, said in an email that some more traditional financial institutions have also increased their interest in DeFi.

Arslanian wrote: “Although they are still a long way from using decentralized applications, many financial institutions are working hard to improve education and trying to understand the potential impact that DeFi may have on the future of financial services.”

In 2020, the average return of crypto hedge funds is 128% (30% in 2019). The vast majority of investors in such funds are either high-net-worth individuals (54%) or family offices (30%). In 2020, the proportion of crypto hedge funds with assets under management of more than US$20 million will rise from 35% to 46%.

At the same time, the report stated that 47% of traditional hedge fund managers (with assets under management of US$180 billion) have invested or are considering investing in cryptocurrencies.

Arslanian said: “The fact that we have worked with AIMA and included traditional hedge funds in this year’s report shows that cryptocurrencies are rapidly becoming mainstream among institutional investors.” “This was unthinkable 12 months ago.”