Giant Hedge Funds to take on Crypto market: Is it good or bad for investors

Are hedge funds prepared to take on the bitcoin market? While it’s improbable, some people do have a habit of dipping their toes. These toes can be rather large.

The Wall Street Journal dives further into the subject in the article “Bitcoin is a Mainstream Investment Opportunity for Hedge Funds.” We also get a better idea of who’s doing what and who hasn’t arrived yet.

Funds intend to boost their crypto holdings

According to Coinbase’s estimates, institutional investors transferred $1.14 trillion in cryptocurrencies in 2021, up from $120 billion the year before and more than double the $535 billion exchanged by ordinary investors.

Those figures fly by. Predictions from a survey This story was covered by NewsBTC nine months ago:

“The results of the poll, according to Intertrust, reveal that hedge funds intend to boost their crypto holdings over the next five years.”

According to a median figure based on the replies, funds plan to keep $313 billion in digital assets by 2026, which is almost 7.2 percent of their total assets.”

What Hedge Funds aims for?

The most current information was provided by Brevan Howard Asset Administration and Tudor Funding Corp., both of which are owned by Paul Tudor Jones, who said a few months ago that bitcoin is 100 percent certain. What precisely are these hedge funds up to?

“In January, Brevan Howard founded a bitcoin hedge fund that is currently accepting outside investors. The fund is seeking for currency arbitrage as well as speculating on the direction of bitcoin, ether, and other cryptocurrency prices.”

In September, Brevan Howard created BH Digital, a new crypto business with approximately $250 million in assets under management and 12 portfolio managers.”

What Hedge Funds are for?- how does it help

The justifications are more ruthless than most people may think. Consider the following example:

The crypto market is still relatively young, with plenty of “inefficiencies,” or opportunities for major firms with access to timely and accurate data to profit.

Unskilled and individual traders abound in the bitcoin market, unable to compete with fast-moving funds.

Wall Street firms haven’t established dominance, opening up fresh opportunities for new players

Traditional hedge-fund buying and selling methods, particularly those based on value and quantity patterns, frequently work in crypto.

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Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing