$75 billion hedge fund Renaissance Technologies is eyeing the bitcoin futures market
Renaissance Technologies, one among the largest hedge funds in the world, has been eyeing the bitcoin futures market, in keeping with a regulatory type filed final month.
The $75 billion hedge fund, which is finest identified for pioneering quantitative-based investing, stated in a March 30 dated Form ADV that its Medallion Funds are actually “permitted to enter into bitcoin futures transactions.” The agency stated it will restrict its buying and selling actions to contracts traded on the CME. It’s not clear if the agency has bought any bitcoin futures at this level.
Launched in 2017, CME’s bitcoin futures are cash-settled which permit buyers to invest on the burgeoning asset with out having to take supply of bitcoin itself. As The Block first reported earlier this week, CME Group noticed an uptick in new accounts buying and selling its bitcoin futures contracts throughout the first quarter of 2020. Still, the variety of giant merchants and hedge funds utilizing the product hit a low for 2020 in March, in keeping with The Block analysis.
Renaissance’s ADV type, which provides buyers details about its enterprise practices, notes the danger of buying and selling bitcoin and bitcoin-linked derivatives:
“The underlying commodity for these futures transactions, bitcoin, is a relatively new and highly speculative asset. Bitcoin and futures based on bitcoin are extremely volatile, and investment results may vary substantially over time. These instruments involve substantially more risk and potential for loss relative to more conventional financial instruments. Investments of this type should be considered substantially more speculative and significantly more likely to result in a total loss of capital than many other investments.”
On Friday, Renaissance’s chief Medallion fund made headlines for its efficiency. The Wall Street Journal reported that the $10 billion fund gained 24% year-to-date as volatility gripped world markets. The Long Island-based agency picked up 9.9% in March.
To make certain, it is not clear whether or not or not the agency’s potential transfer into bitcoin could be bullish for the crypto as Renaissance might be utilizing the contracts as a car to go brief.
As famous by The Journal, the agency can maintain 1000’s of shares at any given time. At the identical time, it additionally bets in opposition to 1000’s of shares of equities, currencies, and commodities.
Founded in 1982, the agency is led by award-winning mathematician James Simons. As famous by Bloomberg, the hedge fund’s Medallion funds for are identified for his or her excessive returns, returning to buyers a median annual return of 40% from 1988 to 2018.