Bitcoin sets new ATH; Triggers Pimco to consider trading cryptos

Bitcoin (BTC), the largest crypto by market capitalization, has surged to new heights after the ProShares Bitcoin Strategy ETF listed on the New York Stock Exchange (NYSE). The digital asset opened this week changing hands at $61,548.80 and surged to revisit the $64,000 level on October 19, the day of the ETF’s listing.

The ETF, which trades under the ticker symbol BITO, recorded a transaction volume of $320 million in its first 30 minutes of trading. This warm welcome helped push BTC’s price higher, breaching its April 14 all-time high (ATH) of $64,863.10. 

The flagship cryptocurrency continued trending higher and set a new ATH at $77,214.39 on October 26 before facing a slight downward correction to close trading at $65,992.84. At the time of writing, BTC is changing hands at $65,875.42. BTC’s market cap has also soared past its previous ATH of $1.211 trillion to hit $1.243 trillion. 

BTC’s rally also triggered a bull run in most altcoins, pushing the crypto market’s capitalization to $2.66 trillion. This figure depicts a 4.84% increase over the past 24 hours.

Pimco plans to start trading cryptos

Following the crypto market’s impressive performance, Pimco, a fixed-income asset manager with over $2.2 trillion in assets under management (AUM), decided to increase its exposure to digital assets. The company’s CIO, Daniel Ivascyn, disclosed this news during an interview on October 20, saying Pimco is looking to start trading specific cryptocurrencies as part of its trend-following strategy. 

While this move would mark the company’s first direct investment in crypto, Ivascyn disclosed that some of Pimco’s hedge fund portfolios are already trading 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.”

He further noted that the company warming up to crypto would be a gradual process, which involves spending a lot of time on the internal diligence side by speaking to investors. Ivascyn further noted that Pimco intends to take baby steps regarding embracing the rapidly-growing crypto space.

Preparing for a DeFi-powered future

In the interview, Ivascyn emphasized that it is vital for players in the financial space to understand the decentralized finance (DeFi) sector. According to him, the industry has the potential to disrupt the finance space. With this in mind, he revealed that Pimco is thinking of scenarios in which DeFi might land the company. 

Ivascyn added that Pimco is exploring ways to ensure it is competitively prepared to deal with the rapidly evolving sector, which offers a considerable value proposition, especially for the younger generation or the new generation of the investment community. 

While Ivascyn has an open outlook on crypto, he pointed out that the sector comes with a tremendous amount of volatility, which exposes investors to additional risk. He added that the crypto space is here to stay, but investors must pay attention to regulatory responses. 

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