{"id":279487,"date":"2021-06-21T00:30:00","date_gmt":"2021-06-20T21:30:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/4-reasons-why-paul-tudor-jones-5-bitcoin-exposure-advice-is-difficult-for-major-funds\/"},"modified":"2021-06-21T00:30:00","modified_gmt":"2021-06-20T21:30:00","slug":"4-reasons-why-paul-tudor-jones-5-bitcoin-exposure-advice-is-difficult-for-major-funds","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/4-reasons-why-paul-tudor-jones-5-bitcoin-exposure-advice-is-difficult-for-major-funds\/","title":{"rendered":"# 4 reasons why Paul Tudor Jones&#8217; 5% Bitcoin exposure advice is difficult for major funds"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a405eb6d9e9a\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a405eb6d9e9a\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/4-reasons-why-paul-tudor-jones-5-bitcoin-exposure-advice-is-difficult-for-major-funds\/#Hurdle_1_Perceived_risk\" >Hurdle 1: Perceived risk<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/4-reasons-why-paul-tudor-jones-5-bitcoin-exposure-advice-is-difficult-for-major-funds\/#Hurdle_2_Indirect_exposure_is_nearly_impossible_for_US-based_companies\" >Hurdle 2: Indirect exposure is nearly impossible for US-based companies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/4-reasons-why-paul-tudor-jones-5-bitcoin-exposure-advice-is-difficult-for-major-funds\/#Hurdle_3_Fund_regulation_and_administrators_may_prevent_BTC_purchases\" >Hurdle 3: Fund regulation and administrators may prevent BTC purchases<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/4-reasons-why-paul-tudor-jones-5-bitcoin-exposure-advice-is-difficult-for-major-funds\/#Hurdle_4_The_traditional_banking_industry_remains_a_conflict_of_interest\" >Hurdle 4: The traditional banking industry remains a conflict of interest<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># 4 reasons why Paul Tudor Jones&#8217; 5% Bitcoin exposure advice is difficult for major funds <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-128018ef>In an interview with CNBC on June 14, legendary investor Paul Tudor Jones sounded the alarm over advancing inflation. After last week&#8217;s consumer price index (CPI) report showed that United States inflation had hit a 13-year high, the founder of Tudor Investment advocated for a 5% Bitcoin (BTC) portfolio allocation.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-06\/158ef9f6-4902-4be2-ac4d-e1b7e6720fa3.png\"><figcaption style=\"text-align: center;\"><em>Mutual Fund companies ranked by assets under management, USD. Source: MutualFundDirectory.org<\/em><\/figcaption><\/figure>\n<p>When combined, the world&#8217;s 50 largest asset managers oversee $78.9 trillion in funds. A mere 1% investment in cryptocurrencies would amount to $789 billion, which more than Bitcoin&#8217;s entire $723 billion market capitalization. <\/p>\n<p>However, there&#8217;s a fundamental misunderstanding on how this industry works, and this is what impedes a 1% allocation, let alone a 5% one.<\/p>\n<p>Let&#8217;s investigate a few major hurdles that the traditional financial sector will have to vault before really becoming Bitcoin apes. <\/p>\n<h2><span class=\"ez-toc-section\" id=\"Hurdle_1_Perceived_risk\"><\/span>Hurdle 1: Perceived risk<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Investing in Bitcoin remains a significant hurdle for large mutual fund managers, especially considering their perceived risk. On June 11, The U.S. Securities and Exchange Commission (SEC) warned investors about the risks of Bitcoin futures trading \u2014 citing market volatility, a lack of regulation and fraud.<\/p>\n<p>Even though several stocks and commodities have similar or even higher 90-day volatility, somehow, the agency&#8217;s focus remains on Bitcoin. <\/p>\n<p>DoorDash (DASH), a $49 billion U.S. listed company, holds a 96% volatility, versus Bitcoin&#8217;s 90%. Meanwhile, Palantir Technologies (PLTR), a $44 billion U.S. tech stock, has an 87% volatility. <\/p>\n<h2><span class=\"ez-toc-section\" id=\"Hurdle_2_Indirect_exposure_is_nearly_impossible_for_US-based_companies\"><\/span>Hurdle 2: Indirect exposure is nearly impossible for US-based companies<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Most of the mutual fund industry, mainly the multi-billion dollar asset managers, cannot buy physical Bitcoin. There is nothing specific about this asset class, but most pension funds and 401k vehicles do not allow direct investments in physical gold, art, or farmland.<\/p>\n<p>However, it is possible to circumvent these limitations using exchange-traded funds (ETFs), exchange-traded notes (ETN), and tradeable investment trusts. Cointelegraph previously explained the differences and risks assigned to ETFs and trusts, but that only scratches the surface as each fund has its own regulations and limits.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Hurdle_3_Fund_regulation_and_administrators_may_prevent_BTC_purchases\"><\/span>Hurdle 3: Fund regulation and administrators may prevent BTC purchases<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>While the fund manager has complete control over the investment decisions, they must follow each specific vehicle regulation and observe the risk controls imposed by the fund&#8217;s administrator. Adding new instruments such as CME Bitcoin futures, for example, might require SEC <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>roval. Renaissance Capital&#8217;s Medallion funds faced this issue in April 2020.<\/p>\n<p>Those opting for CME Bitcoin futures, such as Tudor Investment, have to constantly roll over the position ahead of monthly expiries. This issue represents both liquidity risk and error tracking from the underlying instrument. Futures were not designed for long-term carry, and their prices vastly differ from regular spot exchanges.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Hurdle_4_The_traditional_banking_industry_remains_a_conflict_of_interest\"><\/span>Hurdle 4: The traditional banking industry remains a conflict of interest <span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Banks are a relevant player in this field as JPMorgan, Merrill Lynch, BNP Paribas, UBS, Goldman Sachs, and Citi figure among the world&#8217;s largest mutual funds managers.<\/p>\n<p>The relationship with the remaining asset managers is tight because banks are relevant investors and distributors of these independent mutual funds. This entanglement goes even further because the same financial conglomerates dominate equities and debt offerings, meaning they ultimately decide on a mutual funds&#8217; allocation in such deals.<\/p>\n<p>While Bitcoin is yet to pose a direct threat to these industry mammoths, the lack of understanding and risk aversion, including the regulation uncertainties, cause most of the global $100 trillion professional fund managers to avoid the stress of venturing into a new asset class.<\/p>\n<p><em>The views and opinions expressed here are solely those of the <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/noshitcoins\"><em>author<\/em><\/a><em> and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.<\/em><\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/4-reasons-why-paul-tudor-jones-5-bitcoin-exposure-advice-is-difficult-for-major-funds\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# 4 reasons why Paul Tudor Jones&#8217; 5% Bitcoin exposure advice is difficult for major funds &#8221; In an interview with CNBC on June 14, legendary investor Paul Tudor Jones sounded the alarm over advancing inflation. After last week&#8217;s consumer price index (CPI) report showed that United States inflation had hit a 13-year high, the&#8230;<\/p>\n","protected":false},"author":1,"featured_media":279488,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDYvNTJmOWM1NDktMGI0ZC00Y2MyLThhNmQtNDdmYWE0NDdhOTU3LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,74937,74858,74863,74898,71939,73785],"class_list":["post-279487","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-price","tag-bitcoin-regulation","tag-cryptocurrencies","tag-sec","tag-banks","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/279487","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=279487"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/279487\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/279488"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=279487"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=279487"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=279487"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}