Investors – such as Warren Buffett and anyone else who believes that “value investing” still exists in a time of centrally planned markets – may hate “irrational”, “intrinsically worthless” cryptocurrencies, but traders – those who thrive on volatility and actually making money – are increasingly warming up to bitcoin et al. Case in point: hedge fund billionaire Alan Howard made “a sizeable personal investments in cryptocurrencies last year and plans to put more of his own money into digital assets and the blockchain technology behind them” Bloomberg reports.
He is not alone as other partners at the macro hedge fund firm he co-founded – one of the world’s biggest – Brevan Howard Asset Management, have independently made similar investments, Bloomberg’s sources revealed although the investments are separate from the $9.1 billion hedge fund firm, as Brevan Howard does not trade cryptocurrencies for its clients.
Bloomberg adds that Howard has already hired at least one person to work for him on initiatives in digital assets and plans to hire more. He could make private-equity style investments in blockchain companies and may participate in initial coin offerings. And judging by the recent slump in crypto prices he will have an attractive entry point.
To be sure, Howard’s interest in cryptocurrencies contrasts with the outright hostility of many luminaries of finance, from Jamie Dimon to Warren Buffett. On the other hand, some “newer generation” advocates of cryptocurrencies have emerged, including former Fortress manager Mike Novogratz and billionaire investors Mark Cuban and Peter Thiel
While Brevan Howard’s flagship hedge fund recorded its worst ever annual performance last year, largely as a result of a lack of volatility amid years of central-bank stimulus which have made it difficult for traders to make money – 2018 has been good for the fund which according to media reports is up in the double digits YTD now that volatility has finally returned if only to the stock market.