Brevan Howard, a European hedge fund management company, has announced that it is expanding its crypto business. BH Digital, the hedge fund’s recently established entity, is expected to “manage its cryptocurrency and digital assets.”
Growing interest in crypto from hedge funds
In addition to founding BH Digital, Brevan Howard has, according to a Reuters report, has also announced that it will hire Colleen Sullivan, the current CEO of the digital arm of trading firm CMT, to lead private and high-risk investments in crypto.
The announcement by Brevan Howard, known for “betting on macroeconomic trends”, is the latest evidence that “large hedge funds” [are] Entering the world of crypto trading. ”To back up claims that institutional investors are switching to crypto, the same report points to recent moves by other high profile money managers such as Paul Tudor and Man Group trading Bitcoin futures.
The report also references an annual report published by Price Waterhouse Coopers, the Alternative Investment Management Association and Elwood Asset Management.
This annual report shows that the value of total assets under management (AUM) of crypto hedge funds worldwide nearly doubled from $ 2 billion in the previous year to $ 3.8 billion in 2020.
Cryptocurrencies are becoming mainstream
Meanwhile, Stuart Cole, the chief macroeconomist at London-based Equiti Capital, is quoted in the report explaining how institutional investors’ perceptions of cryptocurrencies have changed over the years. Cole notes:
What was initially seen as a fad now seems to be moving into a more permanent structure of the financial landscape, and this has started to move the initial fringe financial instruments more mainstream and heavily forcing the institutional interest we see now.
However, the report still admits that not all large companies are accepting cryptocurrencies. It notes that while hedge funds and exchanges are trying to “generate trading income,” global banks have moved more slowly.
This approach by banks has persisted despite pressure from their wealth management clients to offer cryptocurrency trading.
Do you agree that more institutional investors are venturing into crypto? Let us know what you think in the comments section below.
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