(Bloomberg) -- A hedge fund specializing in volatility bets has emerged as one of the largest investors in Bitcoin after quietly buying more than $600 million in cryptocurrencies and joining forces with Alan Howard, the co-founder of Brevan Howard Asset Management.

Eric Peters, chief executive officer of One River Asset Management, said in an interview he set up a new company to seize on the growing interest in cryptocurrencies among institutional investors. In addition to its initial purchases, One River Digital Asset Management has commitments that will bring its holdings of Bitcoin and Ether to about $1 billion as of early 2021, he said.

A surge in cryptocurrency prices and unprecedented monetary-policy moves are increasingly attracting big money to an area that had largely been the realm of retail bettors. Bitcoin surpassed $20,000 Wednesday to hit a record and has almost tripled in price this year.

“There is going to be a generational allocation to this new asset class,” Peters said. “The flows have only just begun.”

Howard is playing a number of supporting roles. In addition to investing in One River Digital’s funds, he’s also buying a stake in the business. A company he controls, Elwood Asset Management, is providing One River Digital with trading services, market analysis and technical support.

A spokesman for Howard declined to comment. Separately, Brevan Howard acquired 25% of Greenwich, Connecticut-based One River Asset Management in October.

Peters was wary of triggering a spike in the prices of Bitcoin or Ether. He described executing his trades as inconspicuously as possible and finishing all the buying in November before Bitcoin hit $16,000.

Another investor with One River Digital is Ruffer LLP, the U.K. investment firm known for its bets on market volatility. Ruffer on Tuesday disclosed a 2.5% position in Bitcoin in one of its funds, describing it as “a small but potent insurance policy against the continuing devaluation of the world’s major currencies.”