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The CoinMetro Team

05.09.2018


Cryptofunds Pushing Traditional Investment Aside

Cryptofunds Pushing Traditional Investment Aside

With the growing popularity of cryptocurrencies, the demand for new Crypto-products is rising. Our upcoming articles will give you a proper insight into cryptofunds, cryptoloans, and unique concepts developed by CoinMetro in a series of blog posts, so let’s start with traditional vs cryptocurrency investment.

Last year was record-breaking for the launch of cryptofunds. There are over 400 of them in the world today. After reading this article, you’ll know what a cryptofund is, what types of cryptofunds exist, what the pros of cryptofunds vs traditional investment funds are, as well as which cryptofunds are most reputable.

What is an Investment Fund?

Generally speaking, an investment fund is money contributed by individual investors to professionals who manage its growth. If we’re talking about a group of investors, each investor in the group can acquire profit inherently.

The main idea of an investment fund is to help investors profit effortlessly with the help of professional fund managers.

The Main Types of Cryptofunds

Similarly to traditional investment funds, there are two main types of cryptofunds: hedge funds and venture capital funds.

Hedge funds are the most common type of investment funds that pool capital from accredited individuals or institutional investors and invests in a variety of – in our case, digital – assets.

Venture capital funds are the type of investment funds that manage the money of the investors that take primary interest in private equity stakes in startups or small- to medium-sized enterprises with big potential.

Cryptofunds vs Traditional Investment Funds

Cryptofunds come with a number of advantages as compared to traditional investment funds.

The main one is higher profitability of cryptofunds, which goes hand in hand with higher risks. Cryptofund, investors can attract investments not only in digital currencies. There are cryptofunds that focus on cooperation with ICOs.

Managing or investing in a cryptofund means taking considerably more risks and making more effort, but only the sky is the limit when it comes to profits.

Another advantage of the funds in question is that the relatively young Crypto market is a strong competitor to fiat currencies. We may well be on the way to replacing fiat with digital currencies… you never know!

Most Reputable Cryptofunds

Arrington XRP Capital is a Crypto hedge fund based in Seattle, WA founded in 2017 by Michael Arrington. Unlike other cryptofunds that invest primarily in Bitcoin and Ethereum, Arrington focuses on Ripple.

BlockTower Capital is a Crypto hedge fund founded in 2017 by former Goldman Sachs’ Matthew Goetz. The fund is based in Stamford, CT. BlockTower has received funding from such large venture funds as Andreessen and Union Square Ventures. Within only several months of launching, BlockTower had $140 million in assets.

Brian Kelly Capital Management is a Crypto hedge fund manager based in New York, founded in 2017 by commentator and investor Brian Kelly. Brian Kelly Capital Management invests in Bitcoin and other Cryptos and digital assets.

Fenbushi is a Chinese venture capital fund founded in 2015 that invests exclusively in blockchain ledger companies. Set up three years ago, Fenbushi is one of the earlier players in the cryptofund scene. The fund’s key people are Feng Tiao and Bo Shen, and Ethereum co-founder Vitalik Buterin used to be the team’s advisor.

Galaxy Digital Assets Fund, also known as Galaxy Digital, was founded by the prominent Mike Novogratz and is based in New York. Novogratz is former Chief Investment Officer for hedge fund giant Fortress Investment Management. Galaxy Digital presumably has around $200 million in assets.

The Logos Fund is a German Crypto hedge fund investor and miner founded by Marco Streng in 2016. Streng used CEO of Genesis Mining. The Logos Fund claims to be the first Bitcoin mining fund. The fund has over $100 million in assets and is one of the largest Bitcoin investment managers in Europe.

MetaStable is the ultimate Crypto hedge fund that invests exclusively in Cryptos (Bitcoin, Bitcoin Cash, Ethereum, Ripple, Litecoin, etc.). MetaStable was founded in 2015 by Naval Ravikant – another prominent player in the Crypto-verse – and is based in San Francisco. What makes MetaStable unique is that it apparently received significant funding from such top venture funds as Sequoia Capital, Peter Thiel’s Founders Fund , and Bessemer Venture Partners.

Pantera Capital is a blockchain venture capital fund founded in 2003 by Dan Morehad and based in Menlo Park, CA. Pantera Capital invests in blockchain startups.

Polychain Capital is a Crypto hedge fund founded by Olaf Carlson-Wee in 2016, based in San Francisco, CA. Carlson-Wee was formerly Head of Risk at Coinbase. Polychain has around $250 million in assets which makes it one of the largest digital asset hedge funds.

Protocol Ventures is a Crypto fund of funds manager focused on ICOs and crypto assets. As a fund of funds manager, Protocol Ventures invests in other Crypto funds. Protocol was founded in 2017 and is based in San Francisco, CA. Protocol Ventures claim to be the first ever Crypto fund of funds.

The Future

To sum it up shortly and sweetly, blockchain technology and cryptocurrencies are on the rise, pushing traditional investment aside with the massive emergence of cryptofunds.

If you missed the latest posts in our blog, we recommend you to have a look at our most recent article Key Players in the Crypto-Verse to find out more about the greatest minds behind the Crypto talk.

See you on Friday!

The CoinMetro Team