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Former US Securities and Exchange Commission (SEC) Chairman Jay Clayton has joined One River Asset Management as an advisor. The SEC-registered investment advisor is a $2.5 billion firm whose cryptocurrency funds are backed by hedge fund titan Alan Howard. The fund quietly bought $600 million in crypto last year and shared its plans to increase its digital asset holdings to about $1 billion as of early 2021. One River started buying BTC in November when it was at $15k. Earlier this year, the founder and Chief Executive Officer Eric Peters said the cavalry of institutional investors is coming in “enormous” numbers with “almost every big credible institution in the U.S.” having discussions about Bitcoin. According to Peters, crypto assets are stores of value that can help diversify a portfolio and provide a hedge against inflation.
“It’s no longer possible to understand what’s happening in markets, let alone where we’re going, without a deep understanding of digital assets, blockchain, tokenization, and virtualization,” Peters said. “The real institutional flows haven’t even started yet.”Up until the Q4 of 2020, Greenwich, Connecticut-based One River Asset Management was mainly betting on market volatility only to launch a digital asset subsidiary. The company then raised funds from clients including Howard and Ruffer LLP to invest in Bitcoin and Ether. At the time, Brevan Howard had acquired 25% of One River and a separate stake in One River Digital Asset Management.
Digitization of the Financial Ecosystem is Already Here
Now, the fund has brought in Clayton as one of the three advisors to Peters. The other two are Jonathan Orszag, an economic consultant who previously worked in the Clinton administration, and Kevin Hassett, who served as chairman of the Council of Economic Advisers under President Donald Trump. Clayton left SEC towards the end of December last year, and Biden nominee Gary Gensler, who taught a class about blockchain at MIT, is expected to replace him. The crypto market was bullish on Clayton’s departure as under him; not a single Bitcoin ETF was approved. Recently, Clayton became the non-executive chairman of Apollo Global Management Inc. “The digitization of our financial ecosystem isn’t just, is coming, it’s already here,” Clayton said in an interview.“Three years ago, I didn’t believe we would be where we are today -- the number of respected investors who have embraced digital assets. I would not have predicted this level of take-up.”Paul Tudor Jones, Stabley Druckenmiller, Ray Dalio, and Dawn Fitzpatrick, CIO at Soros Fund Management, are those investors. Clayton said he doesn't own any crypto assets and isn’t required as part of his advisory role to invest in One River’s funds. He further said, “strong government regulation” both domestically and globally is one of the outcomes amidst a wide range that he sees for crypto assets. While he is “uncertain” about the timeline, Clayton expects an “international coordination” if not consensus on digital assets.