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Cryptocurrency is ‘pure buying and selling 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.

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

“When you take a look at cryptocurrencies as an entire, it’s a pure buying and selling instrument. There isn’t a inherent price in it in anyway. It’s a tulip bulb.”

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

Ellis acknowledged that his $127 billion hedge fund is completely happy to commerce crypto as there’s liquidity to help 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 accordance with the Man Group CEO, the hedge fund doesn’t provide crypto as an “asset administration product,” however it is likely one of the over 800 markets through which the corporate trades.

Commenting on the prevailing crypto funding thesis, Ellis recognized inflation as a serious motive why cryptocurrencies are rising in 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 as a part of efforts to deal with the COVID-19 pandemic.

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

Ellis’s feedback come as extra hedge funds have gotten lively within the crypto funding area. Again in June, Cointelegraph reported that U.S. hedge fund managers anticipate to carry over 10% of their belongings in crypto.

Bitcoin and the crypto market dipping over 50% since Could 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 yr.