The number of crypto hedge funds using decentralized exchanges is growing, according to analysis by BanklessTimes.com, which found 44% of crypto hedge funds now use DEXs, up from 42% in 2022 and 31% in 2021.
The rise suggests DEXs’ popularity is gaining momentum among institutional investors, according to BanklessTimes crypto expert Alice Leetham.
“The number of crypto hedge funds embracing DEXs is quite remarkable, given the challenges that still remain in terms of regulatory uncertainty and cybersecurity,” Leetham said. “It appears that more investors are now recognizing the advantages of decentralized exchanges.”
Leetham said DEXs can offer lower fees, since they do not need to maintain a large infrastructure such as order books and matching engines, in contrast with centralized exchanges.
DEXs also offer greater anonymity, she added, with DEX transactions not recorded on a public blockchain like Bitcoin or Ethereum, making it harder for regulators and law enforcement to track transactions.