The CEO of the Man Group, the world’s largest hedge fund supervisor, says that cryptocurrencies have “no intrinsic value” but that price fluctuations create trading alternatives for his firm.
The head of the Man Group stated: Cryptocurrencies have no “intrinsic value”, but are very easy to trade
Luke Ellis’ remark in an interview with the Financial Times underscores the irony of crypto trading immediately: Much of the market motion that members are concerned in has doubts about their final usefulness.
“If you have a look at crypto basically, it’s a pure trading device. There is no inherent worth on this. It’s a tulip bulb, “Ellis alludes to the flower that turned the focus of Dutch monetary insanity in the seventeenth century.
London-based Man Group, which manages $ 127 billion for shoppers, is thought for its use of quantitative fashions that take benefit of price anomalies and market developments. Ellis stated that crypto is one of the “800 markets we trade today with 15,000 stocks and thousands of loans”.
“We prefer to go long or short depending on what patterns are likely to develop in the market, and we will happily go long or short as long as market liquidity allows a trade,” he stated. “We trade S&P futures in sushi rice futures.”
However, Ellis stated that the Man Group’s dealings with cryptocurrencies doesn’t imply that they are an “asset management product” the place funds “deliver value” by having an asset for traders. . He stated cryptocurrencies are “things to trade because they go up and down all the time”.
Like many in the monetary world, Ellis believes in the potential of blockchain know-how at the coronary heart of cryptocurrencies to make cost methods extra environment friendly. But he rejects the concept that tokens themselves will eternally be a “limited supply tool”.
“You can have a lot of different cryptocurrencies,” he stated. “Everyone can start a new job every day.”
Despite all his doubts about the worth of cryptocurrencies, Ellis sympathizes with the motivations of traders who – rightly or wrongly – have turned to such property as a possible hedge towards inflation.
About Man Group and Luke Ellis
The Man Group is an actively managed firm initially based by James Man in 1783 as a sugar dealer and companion firm. It provides a variety of funds to institutional and retail traders round the world. with $ 117.7 billion in property underneath administration as of December 2019. Headquartered at Riverbank House in London, the firm employs greater than 1,000 folks in numerous places round the world. The firm sponsors creative and philanthropic initiatives, together with the Man Booker Prize.
Luke Ellis was appointed to the Board of Directors in September 2016, having beforehand served as Chairman of Man Group since 2012. During that point he was accountable for working 4 of Man’s funding companies: Man. AHL, Man GLG, Man Numeric, and Mann FRM.
Prior to that, Luke was Head and CEO of Man’s Multi-Management Business and the non-executive Chairman of GLG’s Multi-Management Business. Luke was beforehand CEO of FRM from 1998 to 2008, the place he was one of two companions main the enterprise.
Prior to becoming a member of FRM, Luke was the Managing Director of JP Morgan in London, the place he was Global Head of constructing the firm’s international fairness derivatives and proprietary trading companies.
Luke is vice chairman of the Standards Board for Alternative Investments Ltd and chairman of the board of administrators of Greenhouse Sports Limited.
The Dutch tulip bubble was the first recorded asset bubble disaster as costs continued to skyrocket after which collapse.
Ellis sees cryptocurrencies like a tulip bubble, as this market can be unstable, costs rise sharply after which crash with out warning.
According to the head of Man Group, cryptocurrencies have no intrinsic worth, but this volatility turns into a constructive aspect for worthwhile trading. However, it should even be taken into consideration as the danger is extraordinarily excessive.
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