New research by non-custodial stablecoin management platform Brava Finance shows that 84% of hedge funds who already invest in digital assets say they have a good or better understanding of stablecoins – a digital asset used for making payments or within investment strategies – with 16% saying their knowledge is excellent.
Its study found that 96% of hedge funds which invest in digital assets are already invested in stablecoins, and all of them are using stablecoins to generate a yield. All hedge funds questioned in the US, UK, UAE, EU, Brazil, Singapore, South Korea, Switzerland and Hong Kong say they are developing a strategy about how to invest in stablecoins and what to use them for. Of those, 68% already have a strategy in place.
The most important use case for stablecoins that 88% of hedge funds identified is to gain access to decentralised finance (DeFi) opportunities, the research found. Other primary uses include portfolio diversification (76%), fast, low cost transactions (56%), parking funds in volatile markets (44%), and generating yields from lending protocols (36%).
Almost all (96%) of hedge funds questioned say that institutional investors’ use of stablecoins will increase slightly over the next three years. The launch of BTG Pactual’s $1 stablecoin in Brazil, Wisdom Tree’s special licence to issue and the intention of Deutsche Bank’s Asset Management arm, DWS, to launch this year is evidence that asset managers plan to launch their own stablecoins.
