This $1 Trillion Money Manager Just Joined the Crypto Frenzy

(Bloomberg) -- Add Wellington Management Co. to the list of mainstream investors getting serious about digital coins.

The Boston-based firm with $1 trillion under management is considering including cryptocurrencies in some portfolios, it said in a February report from a team that includes equity research analyst Matthew Lipton and trading technologies principal Lee Saba. The company's systems were upgraded to enable trading in Bitcoin derivatives, and Wellington has started taking positions in companies related to cryptocurrencies.

“Various Wellington teams are already positioning portfolios to take advantage of mining and blockchain implementations by, for example, investing in select chipmakers making components” for tracking and creating digital coins, the report said, without naming specific stocks.

Shares in Taiwan Semiconductor Manufacturing Co., which manufactures chips for Nvidia Corp. and Advanced Micro Devices Inc., have climbed 34 percent since the beginning of 2017 and surged to a record in January. Nvidia more than doubled in the period. Demand for the high-powered chips used in crypto mining comes at a welcome time for TSMC amid waning smartphone sales in China.

Wellington is keen to stress that, for now, it's not snapping up direct exposures in Bitcoin and related currencies, dubbing its official stance as “cautious.” As the firm's analysts dig deeper into digital tokens, they plan to say more on the outlook in due course.

The biggest digital coins as a group fell 12 percent in February after a 15 percent drop in January, according to an MVIS index that tracks the largest and most liquid cryptocurrencies. That's the first back-to-back monthly drop since November 2016.

To contact the reporter on this story: Eric Lam in Hong Kong at elam87@bloomberg.net.

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Todd White, Sid Verma

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