Brevan Howard Expands Further into Crypto as Institutional Interest Rises
Asset manager Brevan Howard is known for its stakes in macroscale economic trends. In addition, it is one of the top-level hedge funds that recently showed an interest in the cryptocurrency universe that is famous for its potential for massive gains and volatility.
The hedge fund Brevan Howard announced that a new unit named BH Digital would be launched to manage cryptocurrency and other digital assets. Colleen Sullivan, CEO of the asset management firm CMT, is claimed to be transferred to lead crypto investments in BH Digital.
Brevan Howard is not the first top-level money manager to venture into the world of cryptocurrency. Previously, hedge fund managers Paul Tudor Jones and Man Group started investing and trading in bitcoin.
According to the annual report by Elwood Asset Management, PriceWaterhouseCoopers, and Alternative Investment Management Association, total assets that cryptocurrency hedge funds manage globally reached $3.8 billion in 2020, while the number was $2 billion in 2019.
Today in the market, there is a broader array of available cryptocurrencies. At the same time, institutional interest in crypto assets increases, the world’s most famous coins (bitcoin and ethereum) are currently trading below their highest-ever value.
The head macroeconomist at UK-based Equity Capital, Stuart Cole, stated:
“What was initially seen as something of a fad now appears to be becoming a more permanent structure of the financial landscape, and this has started to see what were initially fringe financial instruments moving to become more mainstream and very much forcing the institutional interest we are now seeing.”
The examples in the trading space also increase in number. For example, the derivatives exchange of Deutsche Boerse, Eurex, recently released bitcoin futures to join the dynamic market.
Coinbase, one of the best-known cryptocurrency exchange platforms in the world today, states that interest in digital trading assets skyrocketed this year at the institutional level. Towards Q2 this year, the turnover of cryptocurrencies reached a record level of $462 billion. $317 billion of this amount was coming from institutional investors. In Q1 in 2018, however, a considerable part of cryptocurrency trading was done by retail investors.
While cryptocurrency exchanges and hedge funds have strived to hold market profits, global banks are not fast enough to participate in this trend. Given that their clients in wealth management are pressing them to offer crypto trading, it can be claimed that the banks will start following this trend quite soon. A couple of examples already! (CN) is about to launch bitcoin futures for institutional clients to trade. In addition, standard Chartered launched a research department specifically for cryptocurrency mining.
What do you think about the latest increase in institutional interest in cryptocurrency? Please share your thoughts with us in the comments section