Man Group Plc, the world’s largest publicly traded hedge-fund firm, will add cryptocurrencies to its investment vehicles as CME Group’s plans to launch Bitcoin futures open the floodgates to institutional investors who have been standing on the sidelines.
Luke Ellis, CEO of the London-based hedge fund that runs $96 billion in total assets, told Reuters on Tuesday that “there are a number of challenges with cryptocurrencies but that doesn’t mean they’re not investable.”
He said that the new contract from the Chicago-based exchange is to provide a regulated trading venue for the cryptocurrency market, thus allowing Bitcoin to be part of their investment universe.
CME Group announced in late October that it intends to roll out a Bitcoin futures contract in Q4 2017, pending necessary regulatory review periods.
CME’s action not only sparked a big rally in the cryptocurrency, with Bitcoin climbing from $6,000 the day before the announcement to more than $7,900 last week, but it ha also generated a lot of buzz in the institutional investment community.
The independent, transparent Bitcoin benchmark that the world’s largest exchange owner may offer will certainly further professionalize the digital asset class and finally bring it some regulatory cover. It also makes cryptocurrency trading a lot more palatable for the institutional players, as the new instrument will allow them to hedge for Bitcoin volatility and avoid some of the hassles of investing in Bitcoin directly.
Speaking at the Reuters Global Investment Outlook Summit in London, Mr. Ellis added: “There is a big difference between a digital currency and a traditional currency.Traditional ones are supported by governments who have armies and tax men that can make people follow their rules, and digital ones don‘t. But that doesn’t invalidate digital currencies at all.”