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Here are the 3 favorite blockchains of hedge funds

Ripple (XRP)

Where most other cryptocurrencies have been designed for individuals, Ripple Labs has targeted large financial institutions. The network Ripple (RippleNet) aims to provide an alternative platform for transferring funds across borders while creating a private ledger for the databases of these banks.

Many financial institutions are intrigued by this technology and Ripple has received a lot of funding as well as significant partnerships with companies like JP Morgan and Microsoft. Perhaps the only obstacle for Ripple Labs is the ongoing lawsuit with the SEC, which Ripple looks like it could win. Once the lawsuit is settled, you should see a lot more influx of hedge funds thanks to the promise of the Ripple Network.

Ethereum (ETH)

Besides being the second most popular cryptocurrency by market capitalization, Ethereum is also the leading blockchain for decentralized finance (DeFi). With approximately $50 billion in total value locked (TVL), no other blockchain comes close to dominance from Ethereum in this space. And as DeFi is increasingly adopted by hedge funds and other institutional players, Ethereum is the preferred blockchain hosting the largest DeFi protocols.

Blockchain has always faced a scalability problem which results in slow processing and high transaction fees. However, this is about to change with the launch of Ethereum 2.0 in the second half of 2022. This will not only increase the performance of the blockchain, but also decrease the amount of energy used by the network.

Bitcoin (BTC)

As the most popular blockchain network with over 42% dominance according to CoinMarketCap, everyone has their eyes on bitcoin, including hedge funds. You will notice this by the changing attitude towards crypto over the past two years compared to the early 2010s. Back then, hedge funds viewed bitcoin and other cryptos as a bubble, but today Today, almost all hedge funds include BTC in their clients’ portfolios.

“In the US, almost all hedge funds are now exposed to #Bitcoin” Viktor Fischer, Rockaway Capital.

There are still several bitcoin futures on major exchanges through which hedge funds can gain exposure to bitcoin.

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