Hedge Fund Manager Brevan Howard Investing in Digital Assets

Brevan Howard Asset Management, a hedge fund manager that was reportedly gearing up to invest in digital assets, has started to hold the currencies, a regulatory filing confirms.

The firm “has begun trading in cryptocurrencies such as Bitcoin to complement the dozens of other assets in which they invest,” according to a June 7 SEC disclosure. The filing relates to US Capital Advisors’ All Terrain Fund, a closed-end mutual fund which has Brevan Howard as an underlying holding.  

A spokesperson for Brevan Howard declined to comment.

The filing comes after Brevan Howard was preparing to start investing in digital assets, Bloomberg reported in April. The firm was set to invest up to 1.5% of its $5.6 billion hedge fund in digital assets, an unnamed source told the publication at the time.

Brevan Howard acquired a 25% stake in hedge fund firm One River Asset Management last year. One River has focused on offering strategies that remove barriers and promote institutional engagement in digital assets. Its affiliate, One River Digital Asset Management, had commitments to raise its holdings in bitcoin and ether to about $1 billion in early 2021, One River CEO Eric Peters said in December.  

“The broadening adoption of Bitcoin and Ethereum, along with the innovative companies that are rapidly developing the blockchain ecosystem make it more difficult for governments to simply destroy these private systems,” Peters wrote in a January whitepaper. “It is becoming easier to imagine a world where they are permitted to flourish alongside digital dollars, revolutionizing finance in ways that lay beyond the horizon.”

Matthew Edwards, a founding partner, CEO and CIO of Dalpha Capital Management, wrote in an op-ed published in February that the vast majority of traditional hedge funds have limited if any exposure to bitcoin. 

“For every Tudo​r Investment Corporation there are thousands of other funds who give little consideration to crypto beyond what they read in the news,” Edwards noted.

Tudor founder and chief executive Paul Tudor Jones has been among the hedge fund managers who are bullish on bitcoin, and Brevan Howard’s investment in cryptocurrencies is the latest example of fund managers looking to benefit from the space. 

The gradual adoption of bitcoin in the hedge fund and asset management industry continues, Troy Gayeski, partner and senior portfolio manager at SkyBridge Capital said during a June 7 Bloomberg podcast.

Skybridge CEO Anthony Scaramucci said in January that “Bitcoin is here to stay and bitcoin is the winner” after pouring $310 million into its first bitcoin fund. In March, SkyBridge filed to launch a bitcoin ETF with First Trust. Regulators have not yet approved a cryptocurrency ETF in the US.

“We still think we’re in a bull market,” Gayeski said about bitcoin. “Obviously we had a very horrific correction, but we think the trend line is still up here over the next three to six months.”

Bitcoin was priced above $36,000 on Wednesday afternoon, according to CoinGecko, after dipping below $34,000 to a two-week low on Tuesday. The currency had hit an all-time high of more than $63,000 in April. 

Gayeski said on the podcast that bitcoin has built a “stability zone” in the range between $33,000 and $36,000 and noted that it likely won’t reach more than $40,000 or $45,000 in the near-term.

“[The environmental concerns] may slow down some institutional adoption,” Gayeski said, “But if you step back and look at your choices for how you play currency debasement, if you care about liquidity and you care about non-correlation, bitcoin in particular is still a very strong choice for you.”