The CEO of Man Group Luke Ellis compared crypto to tulip bulbs, saying it has “no inherent worth whatsoever.”
The comments made by Man Group CEO Luke Ellis in an interview with the Financial Times highlight an irony of today’s trade-in cryptocurrencies: much of market action involves participants who doubt their ultimate utility.
“If you look at cryptocurrencies as a whole, it is a pure trading instrument. There is no inherent worth in it whatsoever. It’s a tulip bulb,” said. It also referred to the flower that became the focus of a 17th century Dutch Financial mania.
London-based Man Group, the world’s largest publicly listed hedge fund company, does however, trade crypto “it known for using quantitative models that seek to profit from pricing anomalies and trends in the markets.”
According to Ellis, the hedge fund does not offer crypto as an “asset management product.” And said cryptocurrencies were one of the “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 a big size as market liquidity lets you trade,” he said. “We trade S&P futures all the way to sushi rice futures.”
Ellis also identified inflation as a significant reason why cryptocurrencies are becoming more popular within asset portfolios. He has previously called a bitcoin trading instrument rather than a long-term asset allocation.
“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,” he said. “For some of the strategies we trade, we might do very well. But that doesn’t mean it’s a good thing.”