Perhaps inspired by Goldman Sachs' all-in approach to cryptocurrencies and blockchain technology - including possibly launching the first Wall Street crypto trading desk, investing in Circle and securing a patent for its own settlement token - or even JP Morgan Securities buying of bitcoin-linked ETNs on foreign exchanges purportedly on behalf of its clients, another mainstream financial institution is embracing crypto.
As Bloomberg reports, Boston-based Wellington Management Co. - a massive fund company with $1 trillion AUM - is considering adding cryptocurrencies to some of its portfolios, according to a February report from one of its equity analysts.
The company's trading systems were recently upgraded to enable trading in bitcoin derivatives like the futures contracts offered by the CBOE and CME. And it's already adjusting portfolios to include exposure to mining and blockchain implementations by, for example, investing in select chipmakers making components" necessary for mining virtual tokens.
Including crypto exposure in a diversified fund isn't unprecedented in the US. ARK Invest has two ETFs that have exposure to bitcoin via the Grayscale Bitcoin Investment Trust. But it does signal another step toward the merging of the traditional finance world with the world of cryptocurrencies by treating the virtual tokens as their own distinct asset class. Until now, most funds set up to invest in cryptocurrencies typically invest exclusively in crypto.
Late last year, fund manager Mike Novogratz killed plans to launch a hedge fund dedicated to trading cryptocurrencies. Novogratz has also said he's hoping to launch a merchant bank dedicated to cryptocurrencies and ICOs.
Wellington's trial balloon comes at an interesting time: Late last night, the Wall Street Journal reported that the SEC has issued subpoenas and information requests to certain high-profile ICOs, including a Overstock.com's planned tZero offering.
Fortunately, bitcoin prices quickly shrugged off the news and continued to charge higher...