PIMCO plans to expand its exposure to cryptos after BTC sets new ATH

on Oct 21, 2021
  • The company intends to start trading select cryptos as part of its trend-following strategy.
  • PIMCO already has some hedge fund portfolios that invest in crypto-linked securities.
  • Per PIMCO’s CIO, the firm is also trying to stay competitively prepared to enter the DeFi sector.

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PIMCO, a global investment management firm focused on managing active fixed income, is planning to increase the scope of its exposure to digital assets.

The company’s CIO, Daniel Ivascyn, revealed this news during an interview on October 20, saying PIMCO intends to start trading select cryptos. This disclosure makes PIMCO the latest mainstream company to warm up to crypto.

In the interview, Ivascyn revealed that PIMCO has already dipped its toes in crypto. According to him, some of the company’s hedge fund portfolios are already investing in crypto-linked securities.

He added that,

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. So, that was a starting point for us in a very narrow segment of our business.

As for the company’s move to get directly involved with crypto, Ivascyn said it is part of PIMCO’s trend-following strategy and quant-oriented plans. He further noted that the company intends to dip its toes in the crypto market gradually.

Cryptos can serve as inflation hedges

According to Ivascyn, cryptocurrencies can serve as hedges against inflation from a theoretical point of view. However, the sector comes with a massive amount of volatility, which exposes investors to additional risk. He added that the crypto market is here to stay. However, investors need to be careful of regulatory responses.

Ivascyn further noted that PIMCO respects investor demands and it is spending a lot of time analyzing crypto. He detailed that the company is thinking of how the decentralized finance sector (DeFi) can disrupt its business and how venturing into the industry would help PIMCO offer solutions for end investors.

Still talking about DeFi, Ivascyn said the rapidly-growing space has the potential to disrupt the financial industry. To this end, PIMCO is mulling how it can stay competitively prepared to keep up with the industry, which offers a significant value proposition, especially for the younger generation and the next generation of the investment community.

This news comes after the crypto market rallied after the ProShares Bitcoin Strategy ETF (BITO) listed on NYSE. As a result of the bull rally, Bitcoin (BTC/USD) soared to set a new ATH at $66,930.39 (£48,489.39). Altcoins also surged, helping push the crypto market’s capitalization above $2.67 trillion (£1.93 trillion).


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