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Pimco would not be the first institution to take this bold step. Earlier, companies like PayPal and Fidelity had made similar crypto moves.
There are projections that the crypto economy would be seeing growing interest in institutional investors as the sector keeps evolving. This is not false, as Pimco, a fixed-income giant, revealed its plans to go all in crypto by increasing its exposure to digital assets, especially those ones that are full of potentials to disrupt the financial industry.
In an interview with CNBC, Pimco chief investment officer Daniel Ivascyn said that the company plans to go deeper into crypto to follow the trend.
“Now we’re looking at potentially trading certain cryptocurrencies as part of our trend-following strategies or quant-oriented strategies, then doing more work on the fundamental side,” said he.
Per the interview, the decision would materialize gradually as they would need to do proper consultations with investors. “So this will be a gradual process where we spent a lot of time on the internal diligence side speaking to investors. And we’ll take baby steps in an area that’s rapidly growing,” added he.
Although, Ivascyn said the $2.2 trillion asset manager’s hedge fund portfolios are one-way trading crypto-linked securities.
“We’re trading from a relative value perspective. So we’re not taking directional exposure, but we’re looking to take advantage of mispricings between the cash product, popular trust that trades on the exchange, and then the futures. So that was a starting point for us in a very narrow segment of our business,” noted he.
This news came on Wednesday, shortly after the flagship crypto asset, Bitcoin, and the second-largest crypto asset, Ethereum, saw their value surge to over $67,000 and $4100. Interestingly, this surge in value also coincided with when the total market cap of all crypto assets hit a new all-time high of above $2.6 trillion
Pimco would not be the first institution to take this bold step; before it, companies like PayPal and Fidelity had made similar crypto moves. The likes of Square and MicroStrategy have made more courageous steps by adding crypto balance sheets into Bitcoin. Morgan Stanley is not left out among institutions in its class; it became the first bank to offer Bitcoin funds exposure to its clients before Goldman Sachs followed suit.
It is worth adding that their involvement in crypto would still not be the end, as there are expectations that the sector would continue to see increasing entries from more institutional investors. So far in 2021, the industries have received several institutions, indicating the growing mainstream acceptance of cryptocurrencies.
Pimco, founded in 1971, is one of the oldest and largest asset managers on active fixed-income securities. As of December 31, 2020, the total asset under its management was valued at $2.2 trillion.