Renaissance Technologies, a giant hedge fund has opened its doors to investing in Bitcoin Futures. The hedge fund outlined in a recent filing that its Medallion Funds will start trading Bitcoin Futures contracts on the Chicago Mercantile Exchange (CME). At press time, it is not clear whether the firm has purchased any Bitcoin futures yet.

CME’s Bitcoin Futures, launched in 2017, are cash-settled which allow investors to speculate on Bitcoin without having to take delivery of the coin itself. A recent report by The Block revealed that, in Q1 2020, CME Group witnessed a rise in new accounts trading its Bitcoin Futures contracts. Notwithstanding, the number of ‘whales’ and hedge funds using the product hit its 2020 low in March.

A report from The Wall Street journal revealed that, the Medallion Fund gained 24% year-to-date while most institutional funds suffer from volatility. According to the report, the firm can hold thousands of stocks at any given time. It also bets against thousands of shares against equities, commodities and currencies. In the previous month, it rose by 9.9%. The firm has earned investors a gross average of 66.1% per year between 1988 and 2018.

In the filing, Renaissance Technologies noted the risk of trading Bitcoin and its derivatives. The firm stated that investments of this type should be considered substantially more speculative. Adding that, they are significantly more likely to result in the total loss of capital than most investments. The firm also identified other associated risks, with regulatory uncertainty and fraud potential as the principal ones.

Choosing CME as the platform for its Bitcoin Futures investment could affect Medallion’s ability to efficiently trade Bitcoin. This is because, CME has a relatively low liquidity for trading Bitcoin as compared to its rivals like BitMEX and Binance. Hence, Medallion would be forced to take very small positions when trading.