Over half of crypto hedge fund investors are HNIs: PwC
Many investors in crypto hedge funds are either high net worth individuals (54%) or family offices (30%), showed data from PwC’s Annual Global Crypto Hedge Fund Report 2021. The report is into its third edition.
The median investment ticket size is $0.4 million, while the average ticket size is $1.1 million. PwC said the mix in the investor base gradually changed with the increased levels of interest from institutional investors. Crypto hedge funds have a median of 23 separate investors.
The total assets under management (AUM) of crypto hedge funds globally increased to nearly $3.8 billion in 2020, from $2 billion the previous year. Most crypto hedge funds trade Bitcoin, followed by Ethereum (67%), Litecoin (34%), Chainlink (30%), Polkadot (28%) and Aave (27%). There are between 150 and 200 active crypto hedge funds currently and the report says four in every five of these were launched between 2017 and 2020.
Decentralised finance (De-Fi) had extraordinary growth in 2020 and was the year’s buzzword within the cryptocurrency community, the report said. DeFi protocols aim to render peer-to-peer financial services, which allow cryptocurrency trading, loans, interest accounts without the use of traditional banks and traditional financial intermediaries. About 31% of crypto hedge funds use decentralised exchanges, with Uniswap being the most widely used (16%), followed by 1inch (8%) and SushiSwap (4%).