Hedge Fund CEO Says: Cryptocurrencies Are “Pure Trading Instruments”

Jul 26, 2021

Not all hedge fund managers are offered in crypto, as Man Group CEO Luke Ellis in contrast crypto to tulip bulbs.

Speaking to the Financial Times, Ellis commented that the advantages of cryptocurrencies stem from their volatility, presenting the asset class as a viable trading alternative. According to the CEO of the world’s largest publicly traded hedge fund:

“When you take a look at crypto as an entire, it is a pure transaction instrument. There is not any inherent worth on this. It’s a tulip bulb. “

Although an outdated comparison, cryptocurrency and Bitcoin (BTC) in particular are often compared to “tulipmania” – a brief period in which the price of some tulip bulbs in the Netherlands rose exponentially before finally falling apart.

Ellis claims that his $ 127 billion hedge fund likes to trade cryptocurrencies because, given the variable price movement of cryptocurrencies, there is liquidity to support long or short bets. For Ellis, Man Group’s involvement in cryptocurrency does not constitute endorsement of cryptocurrency as an asset class.

According to the CEO of Man Group, the hedge fund does not offer cryptocurrency as a “wealth administration product” however is one among greater than 800 markets by which the corporate trades.

Regarding the prevailing crypto funding thesis, Ellis recognized inflation as the principle motive cryptocurrencies have gotten more and more widespread within the asset class.

In reality, Bitcoin proponents say BTC provides a hedge towards inflation and foreign money decline, particularly given the present world drive for financial restoration as a part of efforts to cope with the COVID-19 pandemic.

Related: Hedge funds see the falling crypto market as an funding alternative

Ellis’s feedback come as extra hedge funds turn out to be extra lively within the crypto funding area. Back in June, Cointelegraph reported that US hedge fund managers are anticipated to carry greater than 10% of their property in crypto.

Bitcoin and the crypto market, which has fallen greater than 50% since May, have been recognized as an funding alternative for giant cash gamers in anticipation of a return to parabolic price volatility later this 12 months.

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