Five hedge fund managers. Each earning more than one billion dollars. But they could have earned more with Bitcoin.
According to the latest research by Bloomberg, the top 5 hedge fund managers are estimated to have earned over $1 billion each. Among the top 10 investments contributing to the success of these 5 were tech stocks such as Facebook Ltd and Alibaba.
While it was a successful year for these fund managers, their results could have been more impressive had they invested in cryptocurrency.
Based on Bitcoin’s results in 2019, which regularly beat the S&P index, had they made steps to integrate the cryptocurrency into their portfolios, there’s a strong chance that these hedge funds could have majorly increased their returns.
Wh0 were the top 5 fund managers?
- Coleman Chase – Tiger Global Management
- Steve Cohen – Point72 Asset Management
- Ken Griffin – Citadel
- Jim Simmons – Renaissance technology
- Chris Hohn – TCI Fund Management
Bitcoin Beat The Top 5 Fund Managers
By the end of 2019, Bitcoin vastly outperformed the S&P index’s 29% returns. It also beat all the funds included in the portfolios of each of the top 5 hedge fund managers.
Case in point:
While Coleman Chase’s main fund returned 33% by the end of the year, the Bitcoin price returned over 85% to people who bought the coin at the start of 2019.
As a result, the replacement of poorer performing assets in the portfolio with Bitcoin or Grayscale Bitcoin Trust Stocks would have upped each of the top 5 hedge fund managers’ returns.
After hedge fund managers compare their results with the results of Bitcoin, perhaps we will see greater investment by hedge funds into Bitcoin and even larger results for the top 5 managers this time next year.
A Bright Future for Funds Containing Bitcoin
Just one and a half months into 2020, Bitcoin has already outperformed the entirety of the S&P’s gains from 2019.
At the start of the year Bitcoin traded at $7,250. Now, one bitcoin costs over $10,000.
These are monumental gains for the cryptocurrency, and if the asset continues to behave this bullish it could mean similarly huge results for hedge funds investing in the cryptocurrency.
Already, crypto asset managers, such as the Grayscale Bitcoin Trust, are reaping in the benefits of the Bitcoin market trends. According to their press release, the Trust had a record-breaking year.
Professionals: ‘Hedge Funds Need To Enter This Bullish Market’
According to professional crypto asset managers, hedge funds investing in Bitcoin would be a strong choice, with the market giving off plenty of bullish signs.
Benjamin Zennou — Managing Partner at Enigma Securities, which is a crypto liquidity provider and blockchain advisory firm, expects asset allocations for Bitcoin to increase over time as the cryptocurrency is perceived as less risky.
Evidence of that change, he says, is the fact “Open interest on CME’s BTC futures just hit its highest level for open interest on record. Importantly, ‘Leveraged funds’ have always been a significant majority of that according to the CFTC (commodity futures trading commission).”
Leveraged funds are funds that use financial debt to amplify returns. An increase in leveraged funds being used to pay for Bitcoin could suggest that fund managers have more trust in Bitcoin since using leveraged funds increases risk.
Benjamin’s analyst, Joseph Edwards attributes three things to the growing interest in Bitcoin: increased liquidity, regulated investing infrastructure and a track record of performance that “prove it has some level of baseline value”
Each of these trends helps change the image of Bitcoin as a “very difficult ride” for investors — as Alistair Cotton described it, into a stable, trust-worthy investment worth receiving a larger asset allocation.
Should BTC be a part of traditional hedge funds? Let us know what you think in the comments below!
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