Billionaire Alan Howard who is the head of Brevan Howard Hedge Fund is looking to make investments in the ever-fluctuating crypto market. Financial Times has confirmed that he is planning to put as much as a $1Billion in the crypto hedge fund.
Brevan Howard’s flagship macro hedge fund recorded its worst ever annual performance last year. Like some other hedge funds betting on economic trends in developed markets, a lack of volatility amid years of central-bank stimulus made it difficult to make money. Now, they seek to capitalize on the volatility of the crypto markets.
“Losing traditional assets in the real world is hard. In the digital world, it’s very easy to lose assets — put in the wrong address for a bitcoin transfer and it’s gone forever,” said Bin Ren who is the CEO of blockchain funds specialist at Elwood.
Ren was earlier the Cheif Invetment Officer at revan Howard’s Systemic Investment Group. He added that screening of the sector had resulted in Elwood identifying up to 50 crypto hedge funds as probably satisfy our due diligence.
While 2018 saw a 72% fall in the price of Bitcoin, the median crypto hedge fund returned -46% over the same period, indicating that these managers were successfully able to outperform their benchmark. However, performance differed based on the type of strategy pursued. The median quantitative fund returned 8% in 2018.
The massive percentage growth of Bitcoin, even in the face of extreme stress testing, has legitimized it in the eyes of investors everywhere. Bitcoin remains a small percentage of the hedge fund industry, but even the oldest and most established funds can see what’s coming.
This broader interest from investors and regulators is undoubtedly a positive step towards digital assets being recognized as an asset class with true viability and longevity.