$46 billion hedge fund Millennium Management was on the verge of diving into crypto

Hedge fund titan Millennium Management was actively exploring how it could break into the cryptocurrency market in recent months, according to four sources familiar with the firm's plans. Now one source tells The Block that the firm will most likely not proceed.

The $46 billion dollar money management firm, which is known for deploying different trading teams known as "pods," was interviewing potential candidates to deploy strategies in the cryptocurrency market until at least some time in September, people familiar with the situation said. The firm was also having conversations with funds to better understand opportunities in the market, the people said.

The project was being spearheaded by the firm's business development team in the Americas. If the original idea had come to fruition, the firm would have likely avoided longer-tail cryptocurrencies and focus on bitcoin, trading CME bitcoin futures, for instance, according to a source. 

But another source said that the plans hit a wall. The person said that now the firm will likely not end up trading in the crypto market, at least in the near term, due to a lack of sufficient opportunities to invest in "vanilla," regulated products. 

Millennium's flirtation with the bitcoin market follows headlines of an apparent increase in interest in bitcoin among hedge funders. Indeed, if Millennium had ended up following through on crypto ambitions, it would have been one of the largest funds active in the market. 

In April, as The Block first reported, $75 billion hedge fund Renaissance Technologies, which is best known for pioneering quantitative-based investing, said in a March 30 dated Form ADV that its Medallion Funds are now "permitted to enter into bitcoin futures transactions." It's not clear if they ever ended up making an allocation to bitcoin futures. 

In May, hedge fund titan Paul Tudor Jones said he views bitcoin as a hedge against inflation. The founder and chief investment officer of Tudor Investment Corp. said that while recent central bank monetary policy will push traditional investors to gold, the world "craves new safe assets."

Millennium's exploration into crypto, meanwhile, may be tied to its broader ambitions to expand into new geographies and asset-classes.   

On the other hand, however, like most funds Millennium has faced headwinds during the Covid-19 economic crisis. As the FT reported in early March, the firm shut more than 10 pods out of its more than 150 trading groups. More recently, the firm reportedly went on on a hiring spree, as per Bloomberg. Over the course of a few weeks in March, the firm added about 100 new people. 

Founded by Izzy Englander in 1989, the investment firm is still one of the most successful funds, having clocked in only one down year in its existence. This year has been one of the firm's best on record, as per a spokesperson. 

This post has been updated with additional information regarding the firm's recent hiring.