Paul Tudor was one of the few early hedge fund managers to get lured into Bitcoin. SEC filings have finally revealed he has been using Coinbase and Bakkt. As two of the leading firms in the US, they have become institutional powerhouses.
When most institutions make crypto investments, more often than not, they do not reveal which brokerage firm they use or they made direct purchases. With American billionaire hedge fund manager Paul Tudor, this was the case. In May of 2020 Tudor bet 1% to 2% of his assets on Bitcoin. Without revealing how it was anyone’s guess whether he had bought directly or used a custodian. It was especially interesting as one of his hedge funds had only started venturing into Bitcoin futures. Documents filed with the US Securities and Exchange Commission (SEC) have now revealed that Paul Tudor used Coinbase and Bakkt.
The two companies have over the years set themselves as the go-to places for institutions looking to buy Bitcoin. Coinbase, in particular, has ties to the purchase of Bitcoin by Tesla (spent $1.5B in Bitcoin early this year), MicroStrategy and Ruffer ($745M in Bitcoin late 2020). These purchases have been made seamless since its acquisition of Tagomi back in 2020. It has since been the company’s institutional arm and a key player to its parent company racking up over $300 million in profits last year. On top of its dominance in the retail division, Coinbase, which is soon to be listed on the NYSE has a grip on the institutional world as well.
Paul Tudor views Bitcoin as a hedge against inflation. And his bet has paid off. Since his entry into the market, the digital asset has gained immensely. According to whale data, the relationship is somewhat symbiotic. His involvement ‘as a whale’ has been crucial to Bitcoin’s performance at the genesis of the bull run. According to Chainalysis, a leading on-chain data provider, whales bought over 500,000 BTC in the last quarter of 2020.
Paul Tudor Works with Bakkt and Coinbase but Is Still Cautious
For now, the filings show that Tudor has limited crypto exposure to a small portion of his clients. According to Coindesk, only Tudor Family Fund II was exposed to the market. This is one of 8 of his funds. It is only open to family and close friends. Notably, not even the $27 billion Tudor BVI Global Fund has made direct investments through Bakkt and Coinbase. His restrictions are somewhat understandable with Bitcoin over the years proving itself radical in price movement. With brokerage from top tier firms such as Credit Suisse and Citigroup in the $1 billion Tudor Jones family fund, his exposure to Bitcoin needs to be calculated.
Both Coinbase and Bakkt have captured the interest of most institutions because of their nature to stay hush about any relationship with them. But with the upcoming listing of Coinbase, this might get a bit complicated as the firm will need to be more transparent about its dealings.
Kiguru is a fine writer with a preference for innovation, finance, and the convergence of the two. A firm adherent to the groundbreaking capability of cryptographic forms of money and the blockchain. When not in his office, he is tuned in to Nas, Eminem, and The Beatles.