Investing.com – The ongoing boom in, and co. Is attracting more and more players: the hedge funds simply can no longer ignore the crypto world. Brevan Howard Asset Management has now announced plans to continue expanding into the crypto space.
According to a Bloomberg report, the Europe-based hedge fund is now planning to open a new subsidiary called BH Digital, which will invest exclusively in cryptocurrencies and other digital assets.
The company started its first investments in the crypto sector back in April. With the establishment of the new department, she wants to “significantly expand” her involvement in the field of digital assets.
CMT Digital’s co-founder, Colleen Sullivan, has been named head of the new department.
Aron Landy, CEO of Brevan Howard Asset Management Fund, said: “Brevan Howard’s belief in the wealth of opportunities in digital assets and their importance for long-term macro investors is why we are pleased to welcome Colleen to the company.”
In addition to Brevan’s expansion, other high profile asset managers have ventured into the crypto market in the past few months. Hedge fund manager Paul Tudor Jones has invested in Bitcoin while Man Group trades with it.
This year’s crypto hedge fund report by consulting firm PriceWaterHouseCoopers, the Alternative Investment Management Association and Elwood Asset Management said total assets under management by crypto hedge funds around the world rose from $ 2 billion last year to just under 3.8 Billion US dollars nearly doubled in 2020.
The most common crypto hedge funds trade in Bitcoin ‘BTC’ (92 percent), followed by Ethereum ‘ETH’ (67 percent), ‘LTC’ (34 percent), ‘LINK’ (30 percent), ‘DOT’ (28 percent) and ‘AAVE’ (27 percent).
About half of the crypto hedge funds trade in derivatives (56 percent), as PwC announced. Short sales, on the other hand, have fallen drastically from 48 percent to 28 percent in 2020.
However, not all hedge funds are convinced of cryptocurrencies. In late August, industry veteran John Paulson – who made billions during the 2008 mortgage crisis – became skeptical of digital assets.
“No, I don’t believe in cryptocurrencies. I claim that cryptocurrencies are just a bubble. For me, cryptocurrencies are a limited supply of nothing. So if the demand exceeds the limited supply, the price will rise. But if the demand falls, then the price also goes down. Cryptocurrencies have no intrinsic value, except that there is a limited amount of them. “
When asked why he didn’t just short the bitcoin, Paulson replied that given the extreme volatility of bitcoin, it was not worth shorting. Instead, he advised gold bars as a store of value. The reason is the “very limited amount of investable”.
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