April 21, 2021

$ 75 Billion Hedge Fund Enters Bitcoin Futures Market

$ 75 Billion Hedge Fund Enters Bitcoin Futures Market

Renaissance Technologies, one of the largest hedge funds in the world, became interested in the bitcoin futures market. About This is reported by The Block.

According to the registration form for the Commission onUS Securities and Exchange Commission (SEC) of March 30, Medallion - the most profitable Renaissance fund - is now "allowed to participate in transactions with bitcoin futures contracts." The fund will limit its activities on the bitcoin market to futures contracts of the Chicago Mercantile Exchange (CME).

In the first quarter of 2020, CME was observedan increase in the number of new accounts that trade bitcoin futures. Nevertheless, the number of large traders and hedge funds in this market in March reached an annual minimum.

The document for the SEC notes the risks of trading bitcoin derivatives:

“Bitcoin, the underlying commodity for these futurestransactions is a relatively new and highly speculative asset. Bitcoin and Bitcoin futures are extremely volatile; these instruments carry significantly greater risks and potential losses compared to more traditional financial instruments. ”

According to The Wall Street Journal (WSJ), Medallion has shown 24% profit since the beginning of the year amid high market volatility.

Interest in bitcoin futures does not mean thatthat Renaissance is optimistic about this market, since the fund can open both long and short positions. As WSJ notes, a fund can hold thousands of stocks, currencies and commodities at any time, and at the same time bet against thousands of other assets.

Renaissance Technologies was founded in 1982.mathematician James Simons. According to The Economist, Simons is the most successful investor of all time. The Medallion fund is known for its high profitability - according to Bloomberg, the fund brought investors an average annual return of 40% from 1988 to 2018.