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Friday, May 20, 2022

Man Group on BTC: «No Inherent Worth»

Man Group chief executive Luke Ellis said cryptocurrencies have «no inherent worth» but still endorsed them as a trading opportunity for investors. 

«If you look at cryptocurrencies as a whole, it is a pure trading instrument,» said Man Group’s Luke Ellis in a «Financial Times» interview (behind paywall). «There is no inherent worth in it whatsoever. It is a tulip bulb.»

Although Ellis noted that Man Group, which has $127 billion in assets under management, does make crypto investments, it was one of «probably 800 markets we trade today on top of 15,000 stocks and thousands of credits».

«We like to be long and short depending on what the models say is likely to happen to the market and we will trade it long and short just as happily and in as big a size as market liquidity lets you trade,» he said. «We trade S&P futures all the way to sushi rice futures.» 

Asset Management Product

Ellis also noted that Man Group’s willingness to invest in crypto did not mean they are an «asset management product» but rather «things to trade because they go up and down a bunch».

And on crypto proponents that laud their finite supply, Ellis refutes the idea.

«You can have an infinite number of different cryptocurrencies,» he said. «Anyone can start another one any day.»

Inflation Concerns

Beyond the pros and cons of investing in cryptocurrencies, Ellis sympathized with those seeking to hedge against inflation.  

«The number one thing that clients are worried about is inflation,» he said.

«I think we stay in a world of very low rates until central banks lose control and when they lose control, it’s not going to be fun. For some of the strategies we trade, we might do very well. But that doesn’t mean it’s a good thing.»

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