Ray Dalio, founder, co-chief investment officer and co-chair of Bridgewater Associates, announced in May 2021 that he has a personal investment in bitcoin, but now the world’s largest hedge fund plans to put its own money in derivatives that are backed by bitcoin.Photo: Brian Snyder/ Reuters
Bitcoin (BTC-USD) broke the $42,000 mark on the news that Ray Dalio’s Bridgewater Associates hedge fund will invest in the world’s leading cryptocurrency.
On Tuesday, the price of bitcoin rose 3.3% to USD 42,571.
Ethereum (ETH-USD) rose 16.5% to $3,020 in a week after co-founder Vitalik Buterin appeared on the front cover of Time magazine.
The news that Bridgewater Associates, the world’s largest hedge fund with $150 billion in assets, will invest in bitcoin is the brightest signal yet that institutional finance is seeing a long-term upward trajectory for the cryptocurrency.
The hedge fund is one of many financial institutions adding bitcoin to their investment portfolios.
Dalio’s company is following a July 2021 move from London-based hedge fund Marshall Wace, which is reportedly set to start its own crypto fund.
Bridgewater Associates plans to invest in an outside vehicle linked to the price of bitcoin, CoinDesk said.
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Dalio announced in May 2021 that he has a personal investment in bitcoin, but this is the first sign that the world’s largest hedge fund plans to put its own money in derivatives backed by bitcoin.
The company told CoinDesk in February, “While we will not comment on our positions, we can say that Bridgewater continues to actively research crypto, but does not currently plan to invest in crypto.”
Recently, there have been signs of a shift in attitudes towards bitcoin from both institutions and regulators.
The US Securities Exchange Commission (SEC) has extended the time it will decide whether to sanction two bitcoin spot exchange-traded funds (ETFs).
The SEC previously had a hostile stance on bitcoin ETFs.
The committee released a statement on both the One River and WisdomTree ETFs stating: “The Commission deems it appropriate to designate a longer period of time for action to be taken on the proposed rule change so that it has sufficient time to consider the proposed rule change and any comments received.”
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On Monday, Goldman Sachs (GS) traded an undeliverable bitcoin option, a derivative that is pegged to the price of bitcoin but is paid out in cash rather than the underlying cryptocurrency.
This is the first time a Wall Street bank has completed an over-the-counter (OTC) bitcoin-related trade.
Galaxy Holdings Digital, the cryptocurrency firm that facilitated the trade, said: “This is the first OTC crypto transaction by a major bank in the US as Goldman Sachs continues to expand its cryptocurrency offerings, fueling the continued maturation and adoption of digital assets.by banking institutions.”
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The move follows news from earlier in March that the Wall Street heavyweight offered crypto-curious clients access to Gallaxy Holdings’ Institutional Ethereum Fund.
Regulatory documents filed with the SEC in early March said “Goldman Sachs & Co.LLC will receive an introductory fee” for clients it introduces to the Galaxy Institutional Ethereum Fund.Watch: Steve Hanke on crypto lobbyists Related .
