Cryptocurrency is ‘pure trading instrument,’ hedge fund CEO says
The CEO of a prominent hedge fund firm speaking at a conference in South Africa recently argued that the digital currency market is not a real market and that the cryptocurrency market is not in fact a real market, but “pure trading instrument.” The CEO, Nikolaos Panigirtzoglou, who is also the founder of Cabot Capital Corporation, said, “While the blockchain is a technology, the cryptocurrency is a pure trading instrument.” He said it is important to distinguish between the two because the cryptocurrency market changes very quickly, and many people are making “huge money” on the trading instrument without having much success in the underlying markets.
Cryptocurrency is a pure trading instrument. It is not a “store of value,” as some people like to say, a phrase that has been used to describe bitcoin. In fact, bitcoin is nothing more than a tool of speculation, albeit a popular one. Hedge fund manager Ron Chernesky, who has been a cryptocurrency pioneer and one of the industry’s most vocal evangelists, said in an interview that bitcoin is a pure trading instrument.
“This is the most powerful lesson I have learned from bitcoin,” says Ari Paul, CIO of hedge fund BlockTower Capital. “We don’t have to explain bitcoin or blockchain or digital currency — it is just a trading instrument.”. Read more about crypto hedge fund reddit and let us know what you think.
Some hedge fund managers are skeptical about cryptocurrencies, as Man Group CEO Luke Ellis likened them to tulip bulbs.
In an interview with the Financial Times, Ellis said that the usefulness of cryptocurrency stems from its volatility, making it a potential trading option. The CEO of the world’s biggest publicly traded hedge fund, according to him:
“When you look at cryptocurrencies as a whole, you’ll see that they’re nothing more than a trading tool. There is no intrinsic value in it at all. It’s a tulip bulb,” says the narrator.
Despite being an outdated analogy, crypto, and particularly Bitcoin (BTC), is often likened to the “Tulipmania” – a short period in which the price of certain tulip bulbs in the Netherlands rose rapidly before ultimately collapsing.
Given the turbulent price movement of cryptocurrencies, Ellis said that his $127 billion hedge fund is delighted to trade crypto since there is liquidity to back long or short positions. The Man Group’s cryptocurrency participation, according to Ellis, is not an endorsement of cryptocurrencies as an asset class.
The hedge fund does not provide cryptocurrency as a “asset management product,” according to the CEO of Man Group, but it is one of the approximately 800 marketplaces in which the firm trades.
Ellis highlighted inflation as a key reason why cryptocurrencies are becoming more popular inside asset portfolios while commenting on the current crypto investing thesis.
Indeed, Bitcoin proponents argue that BTC provides a buffer against inflation and monetary debasement, particularly in light of the present global economic recovery attempts in response to the COVID-19 epidemic.
Hedge funds view a fall in the cryptocurrency market as an investing opportunity.
As more hedge funds enter the crypto investing sector, Ellis’ views are timely. Cointelegraph revealed in June that US hedge fund managers plan to hold over 10% of their assets in cryptocurrency.
With bitcoin and the crypto market down more than 50% since May, big-money investors have recognized it as an investment opportunity in expectation of a return to parabolic price swings before the end of the year.
As cryptocurrencies continue to rise in popularity, hedge fund managers and other traders are scrambling to get in on the action. To attract the interest of these individuals, many big-name players have begun offering products that allow them to participate in the industry without having to buy and store cryptocurrencies themselves.. Read more about is cryptocurrency legal and let us know what you think.
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