$166B Asset Manager Renaissance Eyes Bitcoin Futures for Flagship Fund

Renaissance Technologies’ market-crushing Medallion fund is contemplating leaping into bitcoin futures, current regulatory filings present.

The quantitative analysis-heavy agency has “permitted” the Medallion fund to enter the Chicago Mercantile Exchange’s (CME) cash-settled bitcoin futures market, based on the March 30-dated Form ADV investor brochure. 

Renaissance, which had almost $166 billion in regulatory belongings beneath administration on the finish of 2019 based on that submitting, has successfully signaled that bitcoin may or already is an element for its flagship Medallion fund, whose 66 % common pre-fee annual return since 1988 is unmatched on Wall Street.

The Wall Street Journal reported Friday that the $10 billion Medallion fund had by means of April 14 returned 24 % after charges in 2020, trouncing conventional market indices just like the S&P 500 and DJIA, which had each shaved greater than eight % of their worth over the identical interval.

Medallion has the go-ahead to transact in a monetary instrument broadly thought of to be a proxy for institutional curiosity in bitcoin. CME’s cash-settled contracts present publicity to cost actions with out the opportunity of taking precise possession, a much more in style scheme of late than different physically-settled alternate options.

The inexperienced gentle preceded final week’s surge in open curiosity positions. On Wednesday, CME reported $181 million in excellent bitcoin futures contracts, a 70 % rise from March’s lows however nonetheless nicely under 2020’s peak, close to $338 million.

Whether Medallion is taking part in that market is unknown. The disclosure didn’t state if Medallion had begun shopping for bitcoin futures contracts or deliberate to sooner or later, and Renaissance, notoriously tight-lipped about its best-performing fund, didn’t reply to requests for remark. 

The disclosure additionally acknowledged that this “relatively new and highly speculative asset” carries, within the view of the New York-based fund, myriad dangers.

Among these said: bitcoin’s quick track-record however confirmed volatility, the absence of a governing authority and its common lack of authorized tender standing, “susceptibility to manipulation” on exchanges and by botnets, “increased regulatory scrutiny,” and even its historical past of forking, amongst others.

“Any of these factors could materially and adversely affect the value of the Fund’s investments,” the disclosure stated.

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