Brevan Howard expands further into crypto as institutional interest jumps

Representations of the virtual currency are on a motherboard in this illustration from May 20, 2021. REUTERS / Dado Ruvic / Illustration

• Hires Colleen Sullivan for newly formed CMT Digital crypto division
• Sullivan leads private venture investing
• Turnover on top stock exchange, managed by institutional investors

LONDON, Sept 13 (Reuters) – Hedge fund Brevan Howard said Monday it was expanding its crypto business, the latest sign that institutional interest in the asset class is gaining momentum.

Brevan, best known for betting on macroeconomic trends, is one of the most iconic large hedge funds entering the crypto trading world, known for its volatile markets and scope for oversized profits.

The asset manager said he would create a new entity, BH Digital, to manage cryptocurrency and digital assets. Colleen Sullivan, currently CEO of the digital arm of trading firm CMT, will also be hired to lead private and venture investments in crypto.

Brevan’s expansion is due to other high profile wealth managers who have ventured into this space in the past few months. Hedge fund manager Paul Tudor Jones has invested in Bitcoin, while Man Group (EMG.L) trades Bitcoin futures. Continue reading

An annual report published by PriceWaterHouseCoopers, Alternative Investment Management Association and Elwood Asset Management found that total assets under crypto hedge funds worldwide nearly doubled from $ 2 billion in the previous year to $ 3.8 billion in 2020.

Institutional interest is rising as a wider range of cryptocurrencies become available, while Bitcoin and Ethereum, the most famous coins in the world, trade well below their record highs.

“What was initially seen as a fad now seems to be becoming a more permanent structure of the financial landscape and this has started to make the initial fringe financial instruments more mainstream and strongly forcing the institutional interest we are now,” said Stuart Cole, Senior Macroeconomist at Equiti Capital based in London.

The rise in institutional interest has impacted the trading floor. Eurex, Deutsche Börse’s derivatives exchange, launched Bitcoin futures on Monday to benefit from growing interest.

Coinbase, one of the largest cryptocurrency exchanges in the world, says institutional interest in trading cryptocurrencies has increased this year.

In its letter to shareholders in the second quarter, Coinbase said that cryptocurrency sales hit a record $ 462 billion in the three months to June. Of this, $ 317 billion was traded by institutional investors, the rest by private customers.

For the same period last year, total sales were $ 28 billion, of which $ 17 billion was in institutional trading.

While hedge funds and exchanges have struggled to generate trading income, global banks have been relatively slow to adapt to the trend as their wealth management clients largely pushed them to offer cryptocurrency trading.

Citigroup Inc (CN) is considering offering Bitcoin futures trading for some institutional clients, while Standard Chartered has formed a newly established cryptocurrency research division. Continue reading

Reporting by Simon Jessop and Saikat Chatterjee; Additional coverage from Huw Jones; Edited by Rachel Armstrong and Bernadette Baum

Our Standards: The Thomson Reuters Trust Principles.

source https://www.bisayanews.com/2021/09/13/brevan-howard-expands-further-into-crypto-as-institutional-interest-jumps/