$10 billion investment fund to trade bitcoin futures on CME

 

$10 billion investment fund to trade bitcoin futures on CME
The flagship fund Renaissance Technologies Medallion has grown by 24% since the beginning of the year, while most institutional funds have been defeated. Medallion was named the world's largest hedge fund and has now been authorized to trade bitcoin futures on CME. Trading Bitcoins on the CME Jim Simons, founder of Renaissance Technologies, is considered one of the greatest traders of his time. Renaissance manages the Medallion Fund, which brought investors a gross average return of 66.1% per annum between 1988 and 2018. For comparison, S&P500, the leader of the American economy, had a gross profit of 11.66% for the same period. The Simons Fund has $10 billion in assets under management at the time of writing. The Medallion Foundation mentioned bitcoin futures as a potential trading instrument on page 16 of its March 30 booklet submitted to the SEC. It is reported that the fund will trade bitcoin futures through an institutionalized CME platform. Medallion stresses in its statement that the investment profile associated with bitcoins is risky, noting that "this type of investment should be seen as substantially more speculative and more likely to result in a total loss of capital than many other investments". In addition, the company has also identified 11 other "related risks" with legislative uncertainties and the potential for fraud as key risks. Some risks associated with Bitcoin: 1) its limited history; 2) the absence of any government that has recognized Bitcoin as a legitimate means of payment; 3) the absence of any central authority to issue or control the Bitcoin; 4) its susceptibility to manipulation by attackers or botnets; 5) its susceptibility to fork; 6) its significant price volatility; 7) its possible correlation with price volatility of other digital assets; 8) exposure of Bitcoin exchanges to risk of fraud, manipulation and other abuses; 9) underdeveloped and evolving nature of Bitcoin regulation; 10) increased baseline risk of Bitcoin futures compared to other types of investment instruments; 11) possibility of imposing other requirements or restrictions on Bitcoin futures trading by exchanges or FCMs; and 12) increased regulatory control over participants in the cryptographic industry. Any of these factors may have a significant and adverse effect on the value of the Fund's investments. Since the launch of CME bitcoin trading in 2017, the exchange has been a relatively illiquid platform for this asset. This is due to the fact that most of BTC volume is accumulated on platforms such as BitMEX and Binance, which have more reasonable margin requirements. The choice of a CME can affect Medallion's ability to trade Bitcoin effectively, forcing it to take very small positions. For example, a 1% position size for Medallion is 50% of the open interest in bitcoin futures on a CME at the time of writing. Trading Medallion Bitcoin, however, is huge news among the cryptographic industry. It indicates continuing interest in BTC from major financial brands. Ray Dalio of Bridgewater Associates, a rival hedge fund, has already demonstrated his contempt for the BTC. Dalio said that the major crypt currency is not a good alternative investment as it is neither a means of exchange nor a reliable means of accumulating value. Although the industry already has financial achievements, such as the entry of Pantera Capital and others, the emergence of famous players such as Dalio and Simons can significantly improve the reputation of Bitcoin among the inherited traders. Do you think the capitalization of the cryptovoltaic market will increase after such a large investment fund as Medallion enters the game? Please share your opinion in the comments below.