Despite continuing geopolitical concerns dampening ordinary traders’ appetite for risk, mainstream hedge funds have been piling up at an unprecedented rate in the last four months.
According to people acquainted with the topic, Wall Street veterans like as Tudor Investment Corporation and Brevan Howard Asset Administration LLP have been quietly expanding their balance sheets to crypto.
Brevan Howard, a hedge firm, jumped into crypto in January through a new flagship vehicle called BH Digital, claiming growing demands after crypto values reached a new high in November 2021. The fund, which manages little more than $250 million, also stated that they expect the new unit to attract more than $1 billion.
BH, whose crypto section is managed by ten portfolio managers, is said to have been actively betting on the direction of Ethereum and Bitcoin while looking for arbitrage between cryptocurrencies. The company has also made investments in a number of blockchain and cryptocurrency companies.
Billionaire Paul Tudor Jones of Tudor Investment Corporation, on the other hand, has been making large bets on digital assets as they gradually stand out as a hedge against inflation. Hudson Bay Funds Management LP, another New York hedge fund, has made a fortune investing in crypto-related enterprises with its $15 billion endowment fund.
Citadel Securities LLC, a market leader, has also been quietly integrating cryptocurrency into its operations. The Illinois-based fund received a $1.15 billion investment in January from crypto-related venture capital companies Sequoia Capital and Paradigm, fueling hopes of further professionalizing the crypto business.
According to a new Coinbase analysis, the total amount of crypto exchanged by institutional traders in 2021 would be $1.14 trillion, more than double the $535 billion for individual traders.
In contrast to three years ago, more senior hedge funds are now embracing the cryptocurrency wave as the movement of digital asset values increasingly resembles that of stock prices.
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