Brevan Howard Asset Management and Rothschild Investment are the next two asset management firms to focus on developing the crypto market.
The combined cryptocurrency investments of companies holding over $ 11 billion in capital are around $ 60 million. Brevan Howard initially invests up to 1.5 percent of the fund in digital assets. At the same time, Rothschild Investment on the eve acquired shares in the Grayscale Ethereum Trust in the amount of $ 4.75 million. Let’s talk about the situation in more detail.
To begin with, let us recall that the number of public companies that directly invest in cryptocurrency is still quite small. In this case, we are talking specifically about public organizations – that is, those whose shares are traded on stock exchanges. This means that the mass adoption of blockchain assets has not yet occurred, and the niche as a whole has room to develop.
We have checked the actual data. Today, Bitcoin is in the investment portfolio of 21 public companies. The top three are MicroStrategy, Tesla and the Galaxy Digital fund, which have 91,579, 48,000 and 16,402 bitcoins at their disposal, respectively.
It is noteworthy that in most cases the investment has already yielded serious profits for investors. Sometimes the initial investment amount has grown more than tenfold – this happened with the Riot Blockchain.
In the case of Ethereum, things are not so diverse yet. ETH is held by only one public company in China called Meitu.
In today’s article, we will talk about indirect investments in cryptocurrencies, that is, company representatives invest in them indirectly. However, such a step is still a very important stage in the development of blockchain assets.
Who invests in cryptocurrencies
Brevan Howard Asset Management was founded in 2002. Now, her management is turning more and more attention to the innovation industry, investing 1.5 percent of her $ 5.6 billion hedge fund capital in Distributed Global, a crypto startup. Its co-founders Johnny Steindorf and Tucker Waterman have already reported on cooperation with the fund, Decrypt reports.
However, this is not the first time Brevan Howard has explored the potential for earning money from digital assets. Co-founder of the firm Alan Howard has previously invested personal capital in crypt. In addition, the firm acquired a 25 percent stake in One River Asset Management.
But the management of Rothschild Investment decided to make money on fluctuations in the Ethereum exchange rate. The foundation has invested $ 5 million in the Grayscale Ethereum Trust. Recall that this is a trust in which institutional investors can acquire a part – that is, in fact a share – the cost of which depends on the price of Ether on crypto-exchanges.
The benefits of investing in a trust for large companies are clear. First of all, they do not deal with coins directly, which can be very convenient for people who are inexperienced in blockchain. In fact, they do not need to understand the methods of storing the crypt, the importance of the security of seed phrases and other nuances that cryptocurrency investors are familiar with. In general, they simply transfer money and, if necessary, get rid of their shares in the fund, making a profit.
This investment complements the existing portfolio of Rothschild Investment, which currently manages over $ 1.1 billion in assets. The firm also said it owns over 38,000 shares in the Grayscale Bitcoin Trust (GBTC). Back in January of this year, the company had just over 30 thousand of the aforementioned shares.
We believe that although more and more companies are transferring their funds to cryptocurrencies, this is only the beginning of the massive popularization of blockchain assets in the world. Public companies began to openly invest in Bitcoin only in August 2020 – this was done by MicroStrategy. That is, this asset class still has not become acceptable to all investors, since only a small part of the world’s giants managed to contact it. We hope the situation will change in the near future.