PIMCO Investment Management is showing signs of embracing cryptocurrency investments. PIMCO CIO Daniel Ivascyn says hedge funds of PIMCO have begun “trading crypto-linked securities.” PIMCO manages a total of US$2.2 trillion in assets under management (AUM).
Ivascyn also stated after considering cryptocurrencies previously, PIMCO now intends to “gradually invest more in digital assets.” PIMCO wants to invest in digital crypto assets that have the potential of disrupting the financial industry.
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.
“So this will be a gradual process where we spend 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 Ivascyn.
“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,” Ivascyn said. “So that was a starting point for us in a very narrow segment of our business,” Ivascyn continued.
CNBC states, a number of major financial companies, such as PayPal and Fidelity, have entered the cryptocurrency space. Square and MicroStrategy, for instance, bought bitcoin via using their respective balance sheets. Morgan Stanley debuted offering bitcoin funds, followed by Goldman Sachs.
“You have to understand decentralized finance, because it will be disruptive, and it very well may disrupt our industry, in our business in particular,” says Ivascyn.
PIMCO is “thinking about scenarios where this could take us to ensure that we are competitively prepared to deal with what’s a rapidly changing environment that offers a pretty significant value proposition, particularly for younger generations, or the new generation of the investment community,” Ivascyn maintained.