Home Coinbase Coinbase and Bakkt Are Behind Paul Tudor Jones' Bitcoin Bets, SEC Documents Show – CoinDesk – CoinDesk

Coinbase and Bakkt Are Behind Paul Tudor Jones' Bitcoin Bets, SEC Documents Show – CoinDesk – CoinDesk

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When Paul Tudor Jones wager 1% to 2% of his property on bitcoin in Could 2020 it was unclear the place the billionaire had purchased his crypto, or how. The business remained unsure if his funding was direct. In any case, his hedge fund had began flirting with bitcoin futures solely days earlier than. 

However within the yr since, his agency, the $44.5 billion Tudor Funding Company, has certainly established rails for direct crypto possession. It secured custodial ties with institutional powerhouses Coinbase and Bakkt, in accordance with new filings with the U.S. Securities and Change Fee (SEC).

Coinbase Custody Belief Firm, Bakkt Belief Firm and Tagomi Buying and selling LLC (the institutional brokerage agency Coinbase purchased in May 2020) all present custodial companies to Tudor Jones’ family-only hedge fund, the paperwork state.

The filings present a uncommon glimpse into the hush-hush world of institutional crypto dealmaking, the place well-heeled purchasers pile into an asset class bankers as soon as deemed absurd. Many, like Tudor Jones, see bitcoin as an inflation hedge, and their ranks are swelling within the pandemic economic system.

They’re additionally enjoying a key position within the 2020-21 bull market. On-chain information exhibits whales purchased over 500,000 BTC within the ultimate months of 2020, in accordance with Chainalysis. 

Towards this backdrop are service suppliers like Coinbase who sometimes tout their institutional purchasers as they race to seize but extra hedge funders’ {dollars}. However Coinbase, which didn’t remark for this text, by no means revealed its hyperlinks to Paul Tudor Jones.

Representatives for Tudor Group and Bakkt didn’t reply to CoinDesk’s requests for remark.

A household affair

For now, Tudor Jones seems to be limiting direct crypto publicity to a small nook of his purchasers. “Tudor Household Fund II,” which is open to family members and shut associates of the macro king, was the one one in all Tudor Funding Corp.’s eight hedge funds to reveal crypto custodians on the agency’s annual Type ADV, filed March 31.

Not even the $27 billion Tudor BVI International Fund, which final yr presaged Tudor Jones’ bitcoin romance when it jumped into crypto futures in early Could, has any business tie-ups, in accordance with comparable SEC filings.

The Tudor Jones household fund was price $1 billion eventually verify however the probabilities of all that being bitcoin are slim to none. The unique fund maintains an unlimited community of companions within the custodian and prime brokerage area – names like Deutsche Financial institution, Citigroup, Credit score Suisse – that recommend broad publicity to the worldwide markets.

However a wider swath of Tudor purchasers nonetheless seems poised for direct crypto publicity, in accordance with the asset supervisor’s newest regulatory danger brochure. It included a complete part on the dangers of investing in crypto for the primary time in its four-decade historical past.

“Sure Purchasers are permitted to enter into cryptocurrency transactions as described within the related Providing Supplies,” the doc states, by “direct funding on a spot foundation or oblique funding” in crypto derivatives. Notably, the agency just isn’t holding itself to crypto futures contracts.

The doc doesn’t specify what it means by “sure purchasers.” Nevertheless, in a bit describing what funding methods are solely obtainable to “proprietary accounts” just like the household fund, it doesn’t record cryptocurrency transactions. 

Institutional service suppliers

Tudor Funding Corp. just isn’t the primary big-name asset supervisor to loudly tout its crypto bets whereas conserving its custody hyperlinks extra quiet. 

Britain’s Ruffer Funding pulled the same technique when it purchased $745 million in bitcoin final November with out revealing who was holding the cash. (CoinDesk later revealed Coinbase because the custodian.)

The soon-to-be-publicly-traded Coinbase has expanded properly past its roots as a retail alternate. The agency has served headline-grabbing purchasers like Ruffer, Tesla and MicroStrategy. 

The acquisition of Tagomi, the keystone of Coinbase’s institutional providing, was announced in Could 2020. The deal closed in August 2020.

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