One River Asset Management, a hedge fund specializing in risky investments, invested more than $ 600 million in bitcoin and committed to another $ 1 billion in BTC and ETH by the beginning of 2021.
According to the BloombergEric Peters, the CEO of One River Asset Management, said in an interview that the company is looking to capitalize on the growing interest in cryptocurrencies among institutional investors. The company also joined forces with Alan Howard, the co-founder of Brevan Howard Asset Management.
Peter revealed that One River was cautious about triggering an increase in the price of BTC and ETH and, as such, did its business “in the most discreet way possible”. It finished building its $ 600 million position in November, before the price of the main cryptocurrency reached $ 16,000.
“There will be a generational allocation for this new asset class. The flows have just started. ”
Bitcoin is currently trading at a new historic high above $ 23,000, as institutions begin to gain exposure to the cryptocurrency amid unprecedented monetary policy moves that some fear may lead to currency devaluation and inflation.
Ruffer Investment, a company known for its bets on volatility, also entered the crypto universe this year, reporting a 2.5% position in BTC estimated at more than $ 700 million. The move was described as a “small but powerful insurance policy against the continued devaluation of the world’s major currencies.”
One River was founded in 2013 by Peters and employs volatility and trend tracking strategies, reports Bloomberg. Its Long Volatility Fund and Dynamic Convexity Fund managed to increase during the liquidation of the coronavirus in March and increased 33% and 40% in the year.
As government tax spending has been combined with debt monetization as a way to stimulate growth, Peters believes this is the most interest-bearing macro trade he has ever seen. He is now building a “first-rate trust” fund for institutional clients looking to enter the crypto universe.
The fund will not trade aggressively or make venture capital investments, he said. It will charge 1% fees and allow investors to sell in one day.
Betting on bitcoin, he said, is more risky than betting on gold, but “there are very few convex bets that will help your portfolio when these macro forces start to manifest.”