$ 75 Billion Hedge Fund Enters Bitcoin Futures Market

Renaissance Technologies, one of the largest hedge funds in the world, has become interested in the Bitcoin futures market. AboutThis 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, the CME sawan increase in the number of new accounts that trade Bitcoin futures contracts. However, the number of large traders and hedge funds in this market hit a yearly low in March.

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), since the beginning of the year, Medallion has shown a 24% profit 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 1982mathematician James Simons. According to The Economist, Simons is the most successful investor of all time. The Medallion fund is known for its high returns - according to Bloomberg, the fund provided investors with an average annual return of 40% from 1988 to 2018.

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