Man Group hedge fund CEO Luke Ellis likened cryptocurrencies to tulip rush. At the same time, the fund is interested in trading cryptocurrencies due to their high volatility.
In his interview, Ellis described cryptocurrencies as speculative trading instruments with a high level of risk. The usefulness of cryptocurrencies is measured by their volatility, so in general they can be considered a viable trading tool, Ellis said. Despite the fact that Bitcoin has not been compared for a long time to the tulip fever that arose in the Netherlands in the 17th century, Ellis decided to “revive” the idea.
“If we talk about cryptocurrencies in general, they are used only for market speculation. Cryptocurrencies have the same value as tulip bulbs, ”Ellis said.
Despite the fact that hedge fund Man Group, which manages $ 127 billion in assets, trades cryptocurrencies, Ellis does not consider them suitable for asset management. However, the fund is ready to work with digital currencies, as they have become one of more than 800 markets in which Man Group trades. Given the liquidity, the fund is ready to take long and short positions depending on the volatile dynamics of cryptocurrency prices, Ellis added.
The Man Group CEO believes that the main reason for the popularity of cryptoassets among private and institutional investors is rising inflation. Indeed, Bitcoin proponents are convinced that it can protect investors from depreciating money, especially amid ongoing efforts by governments to rebuild the economy and measures being taken to combat the pandemic.
According to a recent survey by the Financial Times, international hedge funds are ready to invest up to 7% of their funds in cryptocurrencies by 2026. In June, Dan Morehead, CEO of cryptocurrency hedge fund Pantera Capital, said that the fall in the cryptocurrency market is a good opportunity to buy bitcoins.