In May 2020, Wall Street veteran Paul Tudor Jones set off a bitcoin buying frenzy when he revealed that he was investing in BTC as a hedge against the great inflation he predicts will come from the money printing sprees that policymakers are undertaking to buoy the economy in the wake of the COVID-19 crisis.
His revelation was followed by endorsements from other magnates, publicly listed companies, and money managers, including Square, BlackRock, Stan Druckenmiller, Bill Miller, MicroStrategy, Stone Ridge, PayPal, Tesla, and others.
Millennium Management is the latest hedge fund to follow Tudor Jones in going big on BTC. A new report claims that the $48 billion New York-headquartered hedge fund recently traded the shares of the Grayscale Bitcoin Trust (GBTC).
Millennium Management’s Bet On Bitcoin
A report by business publication TheStreet indicates that Millennium Management bought up Grayscale’s shares. Sources familiar with the matter revealed that the hedge fund dabbled with bitcoin last month while the GBTC premium plummeted. Notably, GBTC has been trading at a discount for over a month now since the approval of Canadian bitcoin ETFs.
But despite GBTC’s collapsing premium, it’s not clear whether Millennium Management made any losses with its trade. “The arbitrage is just so broken”, one of the sources observed in reference to the falling premium.
Nonetheless, a multi-billion-dollar asset manager trading GBTC shares in the first place can be viewed as another milestone industry event. Simply put, Millennium Management’s exploration of the crypto realm suggests that institutional demand for crypto has not slowed down.
A Sign Of Accelerating Institutional Interest
Grayscale’s suite of products has become a favorite for institutional investors betting on the blossoming crypto sector without the costs and risks of directly holding the asset. These products give deep-pocketed investors exposure to crypto-assets and they are tradeable 24/7 on a stock market. However, Grayscale announced earlier this week that it is planning to convert the GBTC into a bitcoin ETF (exchange-traded fund).
Millennium Management currently has an eye-popping $48.3 billion in assets under management. Though the number of GBTC shares that the firm owns has not been disclosed, its crypto bet is proof of the large institutional interest.
The rising institutional interest in bitcoin is likely driven by the price of the premier cryptocurrency climbing steadily in recent months. Just last month, the coin was hovering around the $61,000 threshold, though the bulls now seem to be taking a breather. At press time, BTC has seen a 4.49% decline in the past 24 hours to trade at $55,727.