Hedge Fund Tycoon Steven Cohen Invests in Crypto Trading Firm Radkl and Has “Fully Turned” to Cryptocurrency

Billionaire Steven A. Cohen will invest in a new cryptocurrency trading firm, Radkl, The Wall Street Journal reports, marking the latest bet on the digital asset market by a prominent Wall Street investor.

Radkl, a quantitative trading firm specializing in digital assets, was launched on Tuesday. The company will be run by the New York-based GTS team, a high-speed trading firm active in stocks and options. The size of Cohen’s investment in Radkl was not disclosed.

Radkl executives and a spokesman for Cohen said Cohen's financial support came from his personal account, not his hedge fund Point72 Asset Management LP. Cohen will not be involved in the day-to-day operations of Radkl. The move is one of several investments in crypto companies made by Cohen or his companies in recent months.

Cohen said in a statement that cryptocurrencies are still in the early stages of adoption and as more professional investors enter the industry, "savvy institutions and firms like Radkl are needed."

Radkl is not the first crypto company Cohen has invested in. BitTorrent previously reported that Steven Cohen’s hedge fund management company Point72 raised $50 million in Series A funding for NFT company Recur.

Several hedge fund billionaires, including Paul Tudor Jones and Stanley Druckenmiller, have publicly embraced cryptocurrencies since last year, helping to drive up their prices. Bitcoin’s price has more than quadrupled in the past 12 months to about $46,500 on Tuesday, but is down more than 25% from its all-time high in April.

The rapid growth of cryptocurrencies has drawn close attention from regulators. U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler warned that the crypto market is rife with fraud and called for new legislation to close gaps in digital asset regulation.

Cohen has recently become a fan of cryptocurrencies. In a June interview with online publication Sundy Refltions, he said he had become “completely converted” to cryptocurrencies and praised the disruptive potential of its underlying blockchain technology.

In August, Point72’s venture capital arm invested in crypto data and analytics provider Messari. Cohen will also join the board of directors of Rrecur, a startup focused on NFTs.

GTS CEO Ari Rubenstein said in an interview that Radkl plans to engage in multiple types of trading. One is to make electronic markets on cryptocurrency exchanges - quoting prices for assets throughout the day and profiting from the spread between the buy and sell prices. Rubenstein said Radkl also plans to conduct bilateral transactions in digital assets with other companies such as crypto hedge funds.

He added that the new company will be active in decentralized finance (DeFi), a hot sector in the cryptocurrency market that seeks to replicate traditional financial functions such as banking and lending using computer code.

Radkl will be led by GTS partner Ryan Sheftel, formerly global head of fixed-income electronic trading at Credit Suisse Group AG. Radkl expects to have about 24 employees by the end of 2021, Rubenstein said.

GTS handles about 5% of daily U.S. equity trading volume, according to the company. It also serves as a designated market maker for the New York Stock Exchange.