Coinbase and Bakkt Are Behind Paul Tudor Jones’ Bitcoin Bets, SEC Documents Show

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Coinbase and Bakkt Are Behind Paul Tudor Jones' Bitcoin Bets, SEC Documents Show
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When Paul Tudor Jones wager 1% to 2% of his belongings on bitcoin in Could 2020 it was unclear the place the billionaire had purchased his crypto, or how. The trade remained unsure if his funding was direct. In spite of everything, his hedge fund had began flirting with bitcoin futures solely days earlier than. 

However within the yr since, his agency, the $44.5 billion Tudor Funding Company, has certainly established rails for direct crypto possession. It secured custodial ties with institutional powerhouses Coinbase and Bakkt, in response to new filings with the U.S. Securities and Alternate Fee (SEC).

Coinbase Custody Belief Firm, Bakkt Belief Firm and Tagomi Buying and selling LLC (the institutional brokerage subsidiary Coinbase purchased in Could 2020) all present custodial companies to Tudor Jones’ family-only hedge fund, the paperwork state.

The filings present a uncommon glimpse into the hush-hush world of institutional crypto dealmaking, the place well-heeled shoppers pile into an rising asset class bankers as soon as deemed absurd. Many, like Tudor Jones, see bitcoin as an inflation hedge, and their ranks are swelling within the pandemic economic system.

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They’re additionally enjoying a key position within the 2020-2021 bull market. On-chain knowledge reveals $20 million+ whales purchased over 500,000 bitcoins within the closing months of 2020, in response to Chainalysis. 

In opposition to this backdrop are service suppliers like Coinbase who sometimes tout their institutional shoppers as they race to seize but extra hedge funders’ {dollars}. However Coinbase, which didn’t remark for this text, by no means revealed its hyperlinks to Paul Tudor Jones.

Representatives for Tudor Group and Bakkt didn’t reply to CoinDesk’s requests for remark.

A household affair

For now, Tudor Jones seems to be proscribing direct crypto publicity to a small nook of his shoppers. “Tudor Household Fund II,” which is open to kin and shut associates of the macro king, was the one considered one of Tudor Funding Corp.’s eight hedge funds to reveal crypto custodians on the agency’s annual Kind ADV, filed March 31.

Not even the $27 billion Tudor BVI International Fund, which final yr presaged Tudor Jones’ bitcoin romance when it jumped into crypto futures in early Could, has any trade tie-ups, in response to comparable SEC filings.

The Tudor Jones household fund was value $1 billion ultimately examine however the possibilities of all that being bitcoin are slim to none. The unique fund maintains an enormous community of companions within the custodian and prime brokerage area – names like Deutsche Financial institution, Citigroup, Credit score Suisse – that recommend broad publicity to the worldwide markets.

However a wider swath of Tudor shoppers nonetheless seems poised for direct crypto publicity, in response to the asset supervisor’s newest regulatory danger brochure. It included a whole part on the dangers of investing in crypto for the primary time in its four-decade historical past.

“Sure Shoppers are permitted to enter into cryptocurrency transactions as described within the related Providing Supplies,” the doc states, via “direct funding on a spot foundation or oblique funding” in crypto derivatives. Notably, the agency is just not holding itself to crypto futures contracts.

The doc doesn’t specify what it means by “sure shoppers.” Nevertheless, in a bit describing what funding methods are solely accessible to “proprietary accounts” just like the household fund, it doesn’t checklist cryptocurrency transactions. 

Institutional service suppliers

Tudor Funding Corp. is just not the primary big-name asset supervisor to loudly tout its crypto bets whereas maintaining its custody hyperlinks extra quiet. 

Britain’s Ruffer Funding pulled an identical technique when it purchased $745 million in bitcoin final November with out revealing who was holding the cash. (CoinDesk later revealed Coinbase because the custodian.)

The soon-to-be-publicly-traded Coinbase has expanded properly past its roots as a retail trade. The agency has served headline-grabbing shoppers like Ruffer, Tesla and MicroStrategy. 

The acquisition of Tagomi, the keystone of Coinbase’s institutional providing, was introduced in Could 2020. The deal closed in August 2020.



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