Australian Investment Firm Invests in Bitcoin Futures
According to Vimal Gor, head of bond, income, and defensive strategies of Australian investment manager Pendal Group, the asset manager now has "active positions in bitcoin futures."
Speaking to the Australian Financial Review, Gor said that the best way to play cryptocurrencies right now is Bitcoin. And at least for Pendal, the optimal way to obtain exposure to Bitcoin is through the Chicago Mercantile Exchange's (CME) regulated futures market:
It has a futures contract so even though it’s a new asset, the way it trades is like any other asset. To buy bitcoin, you don’t have to be part of the tinfoil hat brigade.
Gor did not disclose how much of the company's A$100 billion (approximately US$73.9 billion) under management is in Bitcoin futures, or what price the firm bought the future contracts at.
The investment is a result of an influx of interest in the cryptocurrency shared by his clients, Gor said:
We have so many clients asking us about bitcoin and what to do and how to get access. Large institutions have stayed away so far, but high-net-worth clients and wholesale investors are leading the charge.
Stone Ridge Asset Management made a similar move recently, responding to client and internal interest in Bitcoin by buying into the asset.
As reported by The BTC Times, the $10 billion asset manager purchased over 10,000 bitcoin through a subsidiary that offers custody and trade execution solutions. According to BitcoinTreasuries, the company is already up 59% on the investment.
Why Bitcoin?
To his credit, Gor appears to be a Bitcoin bull himself.
Speaking on the cryptocurrency from a fundamental level, the investment manager remarked that the vast amount of monetary stimulus taking place is making Bitcoin an obvious bet:
"COVID just accelerated the large structural trends that were already in place. The first and main one was falling official interest rates and bond yields. With large scale central bank QE programs in place, bond yields are going to stay low for a very long time."
As head of bond, income and defensive strategies, Gor is focused heavily on driving safe returns to investors or to allow for hedging in times of drawdowns.
Bitcoin makes sense to Gor because he expects that "government bonds will turn into a dead asset class" as made evident by the fact that there are trillions of dollars worth of negative-yielding bonds. Dan Morehead, co-CIO of Pantera Capital and one of Wall Street's earliest Bitcoin bulls, said in a recent interview with Peter McCormack that 20 percent of global bonds are negative-yielding.
Similar to billionaire asset managers Stanley Druckenmiller and Paul Tudor Jones, Gor thinks that Bitcoin is a fundamentally better bet than gold due to it being digital and having a truly scarce supply.