Point72 Asset Management in ‘Early Innings’ of ‘Big Crypto Push’ – Blockworks

  • The firm, like rival Millennium Management, had already been trading crypto-based institutional products
  • The focus on actively traded spot crypto strategies comes on the heels of Cohen’s personal venture capital-style investments in blockchain technology companies

The staffing of Point72 Asset Management’s burgeoning cryptocurrency operations is starting to take shape as the multi-strategy hedge fund firm deepens its push into digital assets, according to two sources familiar with the matter.

The firm — which is run by founder Steve Cohen and trades a wide variety of traditional financial assets, including equities, commodities and debt — is looking to hire a couple of senior blockchain-focused professionals, including a head of crypto technology who would report to the Mark Brubaker, the firm’s chief technology officer. 

Brubaker, sources said, has been conducting interviews with potential candidates in recent weeks, with some introductions coming by the way of a third-party recruiting outfit focused on crypto.

The second role would be more of a head of digital asset operations, which would encompass coordinating efforts between middle- and back-office teams that support portfolio managers and analysts. Additional junior and mid-level hires are in the works.

The plan for Point72’s crypto dealings — which ought to build upon Cohen’s relatively early venture capital-style investments in the space via his family office and the firm’s venture arm — is to start with quantitative trades and build out a business model from there.

“There are high-level, serious people [at Point72] that are getting in on crypto now,” one source said. “They’re finally taking it seriously. It’s early, but this looks like the early innings of a big push. And it’s finally clear that Steve [Cohen] has signed off on it.”

Prominent hedge funds have by and large stayed on the crypto sidelines. Before the recent market crash, top financiers were worried about regulation; they’re now also worried about whether digital assets will continue to free-fall in what’s been a tough time to enter quickly gyrating markets. 

There’s also the not-insignificant matter of sizable institutional limited partners, especially conservative-leaning sovereign wealth funds, wary of the firm and others they invest with pushing into crypto too fast — especially when it’s unclear, arguably, whether digital assets have a large enough market cap to justify the big tickets Point72 and its rivals need to generate meaningful alpha from those trades. 

To kick things off, the firm last month installed Jump Trading veteran Elie Galam as head of crypto for the quant division, Cubist Systematic Strategies, Bloomberg reported. Galam and at least two supporting portfolio managers have been tasked with doing due diligence on trading fairly liquid, high-market-cap spot cryptocurrencies — plus related derivatives.

The firm had already been trading digital asset-backed ETFs and similar institutional products, including Grayscale Investments’ Ethereum Trust (ETHE) and Bitcoin Trust (GBTC). The Cubist unit is also trading certain crypto derivatives already. 

The firm is not, however, trading spot digital assets. 

Cubist more broadly, meanwhile, is undergoing a bit of an overhaul. Its investment staffers — traditionally divided into “pods” of portfolio managers and supporting analysts who hone their own independent strategies feeding into the firm’s flagship fund — are being reorganized into more of a platform model. 

Here’s how it works: Each trader contributes algorithms, or supporting article intelligence or machine learning applications, to a master quantitative strategy. It’s a setup favored by the likes of DE Shaw and Renaissance Technologies. 

Sources were granted anonymity to discuss sensitive business dealings. A spokesperson for Point72 declined to comment.

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  • Michael Bodley

    Managing Editor

    Michael Bodley is a New York-based managing editor for Blockworks, where he focuses on the intersection of Wall Street and digital assets. He previously worked for the institutional investor newsletter Hedge Fund Alert. His work has been published in The Boston Globe, NBC News, The San Francisco Chronicle and The Washington Post.

    Contact Michael via email at [email protected]

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