New York’s Leading Investment Manager Enters Cryptocurrency Market

Global cryptocurrency adoption has been on the rise since the start of 2021. Major financial firms and leading banks announced direct and indirect investments in crypto-related products in the last seven months. Neuberger Berman, the New York-based investment management firm, became the latest financial firm to enter the crypto market.

In an official filing with the US Securities and Exchange Commission (SEC), the company mentioned that Neuberger Berman Commodity Strategy Fund’s investment strategy will permit actively managed exposure to cryptocurrency investments and digital assets through cryptocurrency derivatives including Bitcoin futures and Ethereum futures.

The strategy also includes investments in bitcoin trusts and exchange-traded funds to gain indirect exposure to bitcoin. The latest announcement from Neuberger Berman came after the cryptocurrency market cap jumped by nearly $700 billion in the last three weeks.

“The value of the Fund’s investments in cryptocurrency is subject to fluctuations in the value of the digital currencies, which have been and may in the future be highly volatile. The value of cryptocurrencies is normally determined by the supply and demand for cryptocurrency in the global market for the trading of cryptocurrency, which consists primarily of transactions on electronic exchanges,” the company mentioned.

“However, the price of crypto, including bitcoin and ether, could drop precipitously (including to zero) for a variety of reasons, including, but not limited to, regulatory changes, a crisis of confidence, flaw or operational issue in the bitcoin network or a change in user preference to competing cryptocurrencies,” the asset manager added.

Institutional Interest in Cryptocurrency Assets

In December 2020, Ruffer Investment Company, the London-based investment management firm, allocated 2.5% funds to Bitcoin in an effort to reduce the company’s gold exposure. In June 2021, Ruffer made a profit of nearly $1 billion on its Bitcoin holdings. The latest jump in the cryptocurrency market cap has played a major role in the institutional adoption of Bitcoin and other digital currencies. In 2021, Tesla, MicroStrategy, Meitu, and Square expanded their crypto holdings significantly.

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