Hedgies liking crypto-nite
THERE is no way you can say Wall Street is not piling into bitcoin, considering the price action at the end of the week.
Thursday’s move from roughly $13,336 to $16,615 cannot be attributed to buy-and-hold crypto enthusiasts adding 0.0002 bitcoin. The pros on the Street will trade anything on any market if they can see a profit.
While volatility is the bane of most people looking at cryptos, it’s mother’s milk for Wall Street, with traders’ ability to get in-and-out-and-in to generate profits.
Thursday’s price moves during stock trading hours in the US saw a $2,400 jump to the upside, with an almost $1,200 pullback in the mix, which illustrates the churn traders look for.
With a $270 billion market cap, bitcoin now has the liquidity that trading pros look for — despite the quotes you will see from their CEOs.
Haggard hedge funds are more than likely the bigger players jumping in, as they attempt to push up their meager performances for the year. Most funds are trailing the S&P 500 results for 2017. A 20 percent gain on bitcoin bets could help bolster their returns.
So I have to believe these funds will be “window-dressing” their books with bitcoin profits for the rest of the year.
That means the “Alt-Investment” line on their annual return letters will be responsible for their best investment ideas for 2017.
They won’t admit to crypto involvement for fear of investors pulling out, because these investors do not want to pay 2 and 20 for a fund that just holds a digital wallet.