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Bitcoin is continuing its upward trajectory, hitting a record high above $11,000 this week. Yet, despite its rising value, hedge fund platforms are rejecting cryptocurrency funds as clients.

Brooklands Fund Management, Mirabella Advisers and Privium Fund Management, which deliver regulatory help for investment firms, have all had discussions with bitcoin funds, reports Bloomberg. However, all three have not taken on any as new clients.

Clayton Heijman, chief executive officer for Privium in the U.K., the Netherlands and Hong Kong, said:

The biggest risk we face is: is this hype? Is it a fad? Or is it here to stay? Is it the Tamagotchi from 20 years ago?

While Oz Eleonora, founder of crypto-asset investment firm Zinica Group and a board member of the Blockchain Institute of Technology in the U.S., claims that there are ‘huge risks’ involved for the platforms, adding:

They’re scared. They want to participate, but there’s a lot of reputation at risk. If you introduce a bitcoin fund without addressing the compliance properly, you’ll anger both the regulator and your client base.

These comments come at a time when the cryptocurrency market is experiencing unprecedented record highs as it soars over $300 billion for the first time. After breaking through the $9,000 barrier many feel that bitcoin will soon hit $10,000 before the end of the year. Yet, regardless of its increasing value, the digital currency has yet to make it as a mainstream currency.

Not only that, but critics of the digital currency remain. The most famous of which is Jamie Dimon, JPMorgan Chase CEO, who called bitcoin ‘a fraud‘ in September, which was shortly followed up with the claim that it was ‘worth nothing.’

Yet, despite this, many are still ready to buy into the crypto market. One of which is the CME Group who are to begin offering bitcoin futures contracts next month, pending regulatory approval. Surprisingly, even though Dimon is against the cryptocurrency it has been reported that the Wall Street bank may help investors trade bitcoin futures as they see an opportunity to reap a profit.

Of course, while some are ready to embrace the digital currency market, others appear to be taking a cautious approach for now.

Brooklands Fund Management, co-CEO Michael Williams, said:

We’re not ready to enter the space. We’re monitoring the market, but cryptocurrencies will need to be a regulated security before we’d consider supporting a cryptocurrency-derived product.

Featured image from Shutterstock.

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