Hedge funds are embracing crypto investments, yet one asset manager states it is all a speculative play.
Not all hedge fund managers are sold on crypto as Man Group CEO Luke Ellis has compared cryptocurrencies to tulip bulbs.
Talking to the Financial Times, Ellis mentioned that the utility of crypto comes from its volatility, therefore showing the asset class as a sensible trading chance. According to the CEO of the world’s largest publicly-traded hedge fund:
If you look at cryptocurrencies as a whole, it is a pure trading instrument. There is no inherent worth in it whatsoever. It is a tulip bulb.
Despite being an outmoded comparison, crypto and also Bitcoin (BTC), in particular, are typically contrasted to the “Tulipmania”– a short duration where the rate of some tulip bulbs rose exponentially in the Netherlands before ultimately crashing.
Ellis mentioned that his $127-billion hedge fund is more than happy to trade crypto, as there is liquidity to support lengthy or brief wagers, offered the rough rate activity of cryptocurrencies. For Ellis, Man Group’s crypto participation does not constitute a recommendation of the cryptocurrencies as an asset class.
According to the Man Team CEO, the hedge fund does not supply crypto as an “asset management product,” however it is just one of the more than 800 markets, in which the company trades.
Discussing the dominating crypto-financial investment thesis, Ellis identified the rising cost of living as a major reason that cryptocurrencies are coming to be extra preferred within asset portfolios.
Without a doubt, Bitcoin advocates claim BTC offers a bush against the rising cost of living as well as financial misusage, especially amidst the present economic recuperation initiatives across the globe to handle the COVID-19 pandemic.
Ellis’ comments come as many more hedge funds are becoming active in the crypto-financial investment space. Back in June, Cointelegraph reported that United States-based hedge fund supervisors anticipate holding over 10% of their assets in crypto.
Bitcoin and also the crypto market dipping over 50% since may has been identified as an investment chance for big-money gamers in anticipation of a go back to parabolic price activities by the end of the year.