Not all hedge fund managers are offered on crypto as Man Group CEO Luke Ellis has in contrast cryptocurrencies to tulip bulbs.
Chatting with the Monetary Occasions, Ellis remarked that the utility of crypto comes from its volatility, thus presenting the asset class as a viable buying and selling alternative. In keeping with the CEO of the world’s largest publicly-traded hedge fund:
“Should you have a look at cryptocurrencies as an entire, it’s a pure buying and selling instrument. There isn’t any inherent value in it in anyway. It’s a tulip bulb.”
Regardless of being an outmoded comparability, crypto and Bitcoin (BTC), specifically, is often compared to the “Tulipmania” — a short interval the place the worth of some tulip bulbs soared exponentially within the Netherlands earlier than finally crashing.
Ellis said that his $127 billion hedge fund is blissful to commerce crypto as there’s liquidity to assist lengthy or brief bets, given the uneven worth motion of cryptocurrencies. For Ellis, Man Group’s crypto involvement doesn’t represent an endorsement of the cryptocurrencies as an asset class.
In keeping with the Man Group CEO, the hedge fund doesn’t provide crypto as an “asset administration product,” but it surely is among the over 800 markets by which the corporate trades.
Commenting on the prevailing crypto funding thesis, Ellis recognized inflation as a serious cause why cryptocurrencies are rising in popularity inside asset portfolios.
Certainly, Bitcoin proponents say BTC affords a hedge in opposition to inflation and monetary debasement, particularly amid the present financial restoration efforts throughout the globe as a part of efforts to deal with the COVID-19 pandemic.
Ellis’s feedback come as extra hedge funds have gotten lively within the crypto funding area. Again in June, Cointelegraph reported that U.S. hedge fund managers expect to hold over 10% of their assets in crypto.
Bitcoin and the crypto market dipping over 50% since Might has been identified as an investment opportunity for big-money gamers in anticipation of a return to parabolic worth actions by the top of the yr.