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Renaissance, which had nearly $166 billion in regulatory assets under management at the end of 2019, has “permitted” the Medallion fund to enter the Chicago Mercantile Exchange’s (CME) cash-settled Bitcoin futures market.
Renaissance, American hedge fund, has decided that its signature Medallion Fund should enter the Chicago Mercantile Exchange’s cash-settled Bitcoin futures market. This is a strategic move by the company to align itself in the highly unpredictable and volatile market.
The $166 billion asset manager has been the most successful hedge fund manager in the world since its inception 38 years ago. The signature Medallion Fund is well known for the best record in investing history. It was established in 1988, whereby it used an improved and expanded form of Leonard Baum’s mathematical models.
According to the wall street journal, the 10$ billion Medallion Fund gained 24% through April. This is in contrast to the traditional stock market which has lost a considerable huge amount of value since the coronavirus outbreak.
The flagship fund is run mostly by fund employees, whereby it offers returns of more than 66% annualized, however, after the company’s fees are deducted the value falls to 39% on average.
The company boasts to be a quantitative investment management company trading the global financial market, dedicated to producing assured returns by strictly adhering to the given mathematical and statistical method. Investors who want to join the hedge fund company through the website, can only do it via invitation, indicating the high volume of investors into the company.
The company is run by a specialized computer scientist and computational linguistics since the company uses huge stored data to analyze and come into a trading decision. As a result, the company’s manager, Simons, has been dubbed as the best money manager globally.
Move by Renaissance to Permit Medallion Fund to Explore Bitcoin Futures
The move was made to diversify its investment portfolio, putting in mind Bitcoin has stamped itself as a huge global market that offers huge returns if invested wisely. The company acknowledged that this is a relatively new and highly speculative asset which comes with several risks.
Some of the highlighted risks include its lack of governing authority and its universal lack of legal tender status, which puts it susceptible to speculative trading. The company also said that Bitcoin deploys a short-track but proven volatility.
“Any of these factors could materially and adversely affect the value of the fund’s investment”, the company noted.
CME Group has been one of the largest Bitcoin futures trading platforms, where it uses controlled methods to come up with its daily figures. Depending on the volume traded, analysts and investors can get a slight idea of the future market price, hence making the asset more predictable and stable to invest.