Its CEO announced a new company that will bring investment to USD 1 billion worth of BTC and ETH in 2021. Alan Howard’s hedge fund will have a stake in the new company.
Eric Peters, CEO of hedge fund One River Asset Management, recently said that he acquired USD 600 million worth of Bitcoin (BTC). Besides, he announced that in early 2021 he will found a company that will have USD 1 billion worth of Bitcoin and Ether. The announcement occurred after the price of Bitcoin broke the USD 20,000 mark.
Peters said that billionaire hedge fund manager Alan Howard will have a stake in the new venture called One River Digital Asset Management. In 2002, Howard founded Brevan Howard Asset Management, which has managed USD 20 billion worth of assets. He will provide the new investment company with trading services, market analysis, and technical support.
The CEO of River Asset Management mentioned another acquisition of USD 600 million worth of Bitcoin in November. He made that investment while waiting for a break in the price of Bitcoin and Ether. Along with several of his executives, Peters decided to make the acquisition quietly before November ended, when Bitcoin was trading at USD 16,000. By the end of last month, the price of Bitcoin had already reached a new all-time high, close to USD 20,000, on different exchanges. That generated a return close to 18% on that investment.
According to Peters, “there will be a generational allocation to this new asset class. Capital flows are just beginning.” In 2013, he founded One River Asset Management, which manages USD 1.6 billion worth of assets. This company takes advantage of the drop and rebound periods of assets to make extra profit, using trend analysis.
While Market Volatility Grows, Bitcoin and Ether Outperform Gold
Cryptocurrencies have attracted Peters, who predicts there will be more volatility in financial markets. The executive believes that the fiscal and monetary policies of central banks will cause the deterioration of national fiat currencies and inflation.
“The COVID-19 pandemic was the catalyst for that transition,” says Peters. This situation has led Peters to the market for Bitcoin and other cryptocurrencies. “This is the most interesting macro trade that I have seen in my career,” says Peters.
Peters believes that the appreciation of Bitcoin and Ether can exceed that of gold even though the precious metal tends to appreciate in a world of devalued currencies. “It is true that there is more risk in [Bitcoin and Ether] than in gold, which has been around for thousands of years, but there is more convexity in [the two crypto assets].” Peters argues that there are a small number of “convex” bets, such as cryptocurrencies, to help a portfolio.
This year, Bitcoin has seen a noticeable rebound, currently close to 185%, which has gradually attracted institutional investments. After the pioneering cryptocurrency exceeded USD 20,000, there could be a scale change in institutional investment. The announcement that enters the threshold of USD 1 billion demonstrates it.
In recent days, the London Stock Exchange made public that major English fund manager Ruffer invested 2.5% of its portfolio in Bitcoin, which represents about USD 744 million.
By Alexander Salazar
