Bitcoin

Cryptocurrency Hedge Funds Show Huge Growth in 2020

Summary

Billionaire hedge fund investor Paul Tudor Jones: Bitcoin is a ‘great speculation’ Description video: Longtime hedge fund manager Paul Tudor Jones said Monday that he believes Wall Street could be witnessing the historic \”birthing of a store of value\” through […]

Billionaire hedge fund investor Paul Tudor Jones: Bitcoin is a ‘great speculation’

Description video:
Longtime hedge fund manager Paul Tudor Jones said Monday that he believes Wall Street could be witnessing the historic \”birthing of a store of value\” through popular cryptocurrency bitcoin.\n\nLongtime hedge fund manager Paul Tudor Jones told CNBC on Monday that Wall Street could be witnessing the historic “birthing of a store of value” through popular cryptocurrency bitcoin.\n\n“It’s a great speculation,” Jones said on “Squawk Box.”\n\nHe said he has “just over 1% of my assets in bitcoin. Maybe it’s almost 2. That seems like the right number right now.”\n\n“Every day that goes by that bitcoin survives, the trust in it will go up,” he added.\n\nJones, founder and chief executive at Tudor Investment and largely considered one of the best macroeconomic traders ever, told investors in a recent letter that he’s betting on bitcoin as part of a far-larger strategy of maximizing profits.\n\nFor investors who have followed Jones’ success in predicting the path of economic events, including his prescient bets against the U.S. stock market in 1987, his foray into cryptocurrency may seem unusual. But Jones defended his new investment, especially versus other stores of value like U.S. dollars. \n\nModern government-backed currencies, he argued, will almost always diminish in value over time. Many investors shy away from cash over the long term as legislatures continue to spend more than they generate in revenues and lean on central banks to pump cash into the economy, decreasing the purchasing power of each individual dollar.\n\n“If you take cash, on the other hand, and you think about it from a purchasing power standpoint, if you own cash in the world today, you know your central bank has an avowed goal of depreciating its value 2% per year,” Jones said. “So you have, in essence, a wasting asset in your hands.”\n\nBitcoin, on the other hand, isn’t subject to the whims of government spending, but is itself risky because it’s only 11 years old, Jones said. He also confirmed that he has a portion of his portfolio invested in gold, a popular inflation hedge, and said he thought the metal could go “substantially higher” if inflation spikes.\n\n“When I think of bitcoin, look at it as one tiny part of a portfolio. It may end up being the best performer of all of them, I kind of think it might be,” he said. “But I’m very conservative. I’m going to keep a tiny percent of my assets in it and that’s it. It has not stood the test of time, for instance, the way gold has.”\n\nJones also said Monday that the economy would be in a “Second Depression” if the coronavirus pandemic doesn’t get contained in a year.\n\nThe investor told CNBC in late March that the stock market could shoot higher by June if Covid-19 cases began to peak. The S\u0026P 500 is up more than 15% since those comments on March 26 and the Nasdaq Composite has since turned positive for 2020.\n\nFor access to live and exclusive video from CNBC subscribe to CNBC PRO: \nhttps://cnb.cx/2JdMwO7 \n \n» Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision\n» Subscribe to CNBC: https://cnb.cx/SubscribeCNBC\n» Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic\n \nTurn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.\n \nConnect with CNBC News Online\nGet the latest news: http://www.cnbc.com/\nFollow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC\nFollow CNBC News on Facebook: https://cnb.cx/LikeCNBC\nFollow CNBC News on Twitter: https://cnb.cx/FollowCNBC\nFollow CNBC News on Instagram: https://cnb.cx/InstagramCNBC\n \n#CNBC\n#CNBC TV

Cryptocurrency Hedge Funds Show Huge Growth in 2020

Crypto hedge funds are posting significant gains this year, capitalizing on a surge in transactions allowing lenders and borrowers to transact without banks, as well as the sustained rise in the price of bitcoin.

The index of such a hedge fund, launched in September 2018 by the Vision Hill Group crypto fund, showed a return of 126% in 2020.

Other hedge fund sectors were also in the green, but gained a modest 1.70% in September.

«The advent of Decentralized Finance (DeFi), which are crypto platforms that facilitate lending outside of traditional banking institutions, has been at the heart of the robust performance of crypto funds this year.», – said Scott Ermey, founder and CEO of Vision Hill.

Total lending on DeFi platforms in October totaled $ 11.1 billion, industry website DeFi Pulse showed, up 180% from the roughly $ 4 billion in August.. DeFi sites run on an open infrastructure, with algorithms that set rates in real time based on supply and demand.

Framework Ventures, a $ 100M venture capital fund and the largest investor in the DeFi space, believes the decentralized finance segment hasn’t peaked yet.

«Users show how positively they view DeFi opportunities with their investments», – said Michael Anderson, co-founder of Framework Ventures, noting that some DeFi platforms have more volume than much larger digital asset exchanges.

Meanwhile, Bitcoin’s rise of over 80% this year helped propel hedge funds as it sparked a rally in the cryptocurrency market..

Chain Capital has posted a return of 94% so far in 2020 and an average annualized return of 112% since its inception in 2016.

Terry Culver, the CEO of Digital Finance Group USA, said the crypto space has matured and there is a lot more innovation in the industry.

«The sector is no longer as limited as it was three or four years ago», – he said.

Cryptocurrency Hedge Funds Show Huge Growth in 2020