Morgan Stanley: $2 Billion Invested in Cryptocurrency by Hedge Funds in 2017

84 cryptocurrency-focused hedge funds created in 2017, according to the firm.

The cryptocurrency industry received about $2 billion in investment from hedge funds this year, according to a report in Business Insider.

The information was distributed by the bank to its customers in a document entitled “Bitcoin Decoded”. The research was carried out by Morgan Stanley and a consultancy called Autonomous NEXT. It shows that the number of hedge funds created to focus on cryptocurrency ventures has grown to 84 this year – to put that into perspective, last year the number was 11, and 4 in 2015.

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Altogether, the funds made returns of 1,641% as of November 2017, according to hedge fund research company HFR. That figure was 292% for the whole of 2015.

According to CoinDesk, Miller Value Partners, a hedge fund with more than $2 billion in assets under management, is one example of significant investment in Bitcoin. Chairman Bill Miller said in a podcast that one of his ventures is over 50% invested in Bitcoin – he originally bought some back in 2013. Said Miller: “I’d be fairly confident to say it won’t be 50% of the fund for that much longer, which does not mean necessarily we are going to sell it.”

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Morgan Stanley released a report on Bitcoin back in July. The report said that Bitcoin was just a speculative asset not better than a gamble.

At the time, Executive Director James Faucette said: “The disparity between virtually no merchant acceptance and bitcoin’s rapid appreciation is striking. The ecosystem has focused more on value speculation rather than the foot-leather-eating work of increasing acceptance — way easier to trade speculatively than convince new merchants to accept the cryptocurrency.”

Chief Executive Officer James Gorman stated back in September that Bitcoin is more than just a fad. “It’s obviously highly speculative but it’s not something that’s inherently bad,” he said at an event held by the Wall Street Journal.

Morgan Stanley is a financial services firm based in New York. It has had an eventful year, paying fines to the SEC and the CFTC, and opening an innovation lab to help fight the patriarchy.

It is planning to move about 200 jobs from London to Frankfurt in order to continue operations within the EU post-Brexit.

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