The asset manager, Stone Ridge, recently purchased Bitcoin and added it to one of its funds, which is for alternative investments. Many asset mangers are purchasing digital assets, mainly Bitcoin, to explore the crypto’s qualities and get high returns within a short time. Many investors are also changing their main investment from gold and other digital assets to hedge against inflation.
Several countries are suffering from the harsh effective of the pandemic, and investors want to hold their money value. This has caused business men to reduce their gold exposure to other asset classes, which BTC is known as favorite. The asset manager must have added it due to Bitcoin’s growing trend, as many people are demanding and mandating asset managers to include it in their portfolio..
Bitcoin joins Stone Ridge’s list of alternative investments
Bitcoin is it’s latest addition amongst the other 6 investments in it’s alternative fund. The company’s strategy is to invest in different asset types to explore and record gains from the different avenues. The public got to know of this new plan through SEC’s filing, which would be effective from April 26. The purchase would be a good addition for the firm as it sees the world of digital assets and likely enjoys the benefits of the investment class.
The New York-based firm is planning to experiment with different assets that can yield very high returns over a short period. The asset manager is looking to reduce its exposure to stocks and bonds, especially since those assets have been underperforming in America. The firm has explored investment classes in alternative lending, family real estate and healthcare.
The firm would now hold Bitcoin through the put options, meaning that investors under the manager can delve into the digital asset. The virtual currency space is growing at top speed as it continues to remain attractive and preferred by a growing number of people.
Although many governments warn their citizens against it’s high-risk, this doesn’t stop many from taking their chances to earn profits. The asset manager would utilize Bitcoin smart contacts for investors, who are interested in getting exposure.
Stone Ridge to invest into other crypto-related firms
The firm also said that there is a likelihood that it would go deeper into its Bitcoin investment by investing into companies that have strongly invested into the digital asset. Stone Ridge also explained that it understands the asset’s volatility, and the possibility that the value could drop at an unexpected rate. The firm also revealed that some economic problems could lead to a large sell-off the asset, which would hurt its value.
It appeared that Stone Ridge’s founders have always had an interest for the digital asset, and the new Bitcoin addition is not a surprise. The founders had personal investments into Bitcoin before they finally decided to create the alternative investment fund.
But before the fund’s creation, the firm had a subsidiary called New York Digital Investment Group that has grown rapidly over the years. The subsidiary has over $6 billion in Bitcoin, as most of the investors are institutional buyers.