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Joanna Ossinger
Growth stock volatility amid rising interest rates is temporarily slowing institutional investors’ planned forays into cryptocurrencies, according to the founder of a closely-watched hedge fund.
The decision to allocate in crypto has already been made by many traditional institutions, but most have been slow to actually invest, Adam Levinson, chief investment officer at Graticule Asset Management Asia, said in an interview with Bloomberg Television.
“They don’t want their first foray into the space to be a money-losing proposition quickly, so I think it will be a situation where crypto trades better than growth equities over the middle of the year,” Levinson said. “Institutional allocations will wait until the global equity markets, particularly growth equities, have stabilized.”
WATCH: Graticule AM Asia CIO Levinson on Fed, Markets, Crypto (Video)
Institutional adoption has been a major part of the narrative about maturation and price gains in crypto markets. While some participants say they’ve seen significant buy-in from high-profile funds, others have cautioned that most of the heavyweight managers are still not entering yet in a significant way.
“What has happened this year is that you move to an environment where the Fed is being forced to raise rates, as are other central banks,” he said. “And you are seeing a change in the extremely abundant liquidity environment. Crypto suffered. Crypto is basically traded as a risk asset, looking like a growth equity.”
Levinson’s firm now oversees a portfolio of about $3 billion, led a team of people that spun out of Fortress Investment Group LLC in 2015. Fortress Asia Macro Fund, which began trading in 2011, was the predecessor to Graticule.
“We have been involved in crypto materially since 2013,” he said.
— With assistance by Haslinda Amin, and Yvonne Man
