London-based Man Group (ticker: EMG) – the world’s biggest publicly-traded hedge fund firm with $140 billion of assets under management – is about to launch a new fund entirely dedicated to crypto.

Why is Man Group getting into crypto?

1. Institutions are interested.

Mainstream institutions are starting to pay attention now that the no-longer-niche digital asset sector has branched out into a diverse set of assets. Man Group believes we’re witnessing the institutionalization of the crypto market, and while regulation would bring some unknown risks along, the firm thinks that’s unlikely to squash the sector altogether.

2. Crypto’s volatility is a good thing for hedge fund strategies.

Man Group studied bitcoin’s daily price moves from 2017 to mid-2022, and found it’s around four times as volatile as the S&P 500. That means a portfolio with a quarter in the OG cryptocurrency and the rest in cash would see roughly the same daily swings as the SPDR S&P 500 ETF Trust (Ticker: SPY, expense ratio: 0.09%).

That’s no bad thing for big traders: crypto’s volatility and liquidity means they can make money by using different trading strategies – not just holding for longer. Thing is, Man Group thinks a heavier institutional presence could tame crypto’s volatility in the coming years, making it act more like commodities or traditional currencies. So, the good times won’t always be this good for hedge funds that like trading volatile moves, so many are looking to jump in sooner rather than later.

If you want to leave risky ol’ crypto trading to the experts, Man Group’s stock is trading at a price-to-earnings ratio of around 6.4 and offers a yearly dividend yield of about 5%. So if you think the firm’s crypto bet might be a long-term winner, this could be your chance to back it.