Cryptocurrency ’is a pure trading instrument,’ hedge fund CEO says



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 Instances, Ellis remarked that the utility of crypto comes from its volatility, thus presenting the asset class as a viable buying and selling alternative. In line with the CEO of the world’s largest publicly-traded hedge fund:

“In case you take a look at cryptocurrencies as an entire, it’s a pure buying and selling instrument. There is no such thing as a inherent price in it in anyway. It’s a tulip bulb.”

Regardless of being an outmoded comparability, crypto and Bitcoin (BTC), specifically, are usually in comparison with the “Tulipmania” — a short interval the place the value of some tulip bulbs soared exponentially within the Netherlands earlier than ultimately crashing.

Ellis said that his $127-billion hedge fund is pleased to commerce crypto, as there may be liquidity to assist lengthy or brief bets, given the uneven value motion of cryptocurrencies. For Ellis, Man Group’s crypto involvement doesn’t represent an endorsement of the cryptocurrencies as an asset class.

In line with the Man Group CEO, the hedge fund doesn’t supply crypto as an “asset administration product,” nevertheless it is among the over 800 markets, by which the corporate trades.

Commenting on the prevailing crypto funding thesis, Ellis recognized inflation as a serious motive why cryptocurrencies are gaining popularity inside asset portfolios.

Certainly, Bitcoin proponents say BTC provides a hedge in opposition to inflation and financial debasement, particularly amid the present financial restoration efforts throughout the globe to deal with the COVID-19 pandemic.

Associated: Hedge funds see the crypto market decline as an funding alternative

Ellis’ feedback come as extra hedge funds have gotten lively within the crypto funding house. Again in June, Cointelegraph reported that United States-base hedge fund managers count on to carry over 10% of their belongings in crypto.

Bitcoin and the crypto market dipping over 50% since Might has been recognized as an funding alternative for big-money gamers in anticipation of a return to parabolic value actions by the tip of the 12 months.