Well OK! How hard can this be? After I finish this I am going down to the Mandarin Oriental Hotel bar, meet some wealthy business folks and say I can get them ONLY 75,000% ROI. Yeah, I know all the others are getting 84,000% but I am more risk averse. What could possibly go wrong? Don’t get me wrong, I am very bullish long term on cryptos, but these new funds are gonna face reality. When they shake the tree ALL the nuts fall. Shakeout inevitable.
(Bill Taylor, CEO)
“With 43 projects raising $1.2 billion in initial coin offerings since May 1, according to Nick Tomaino’s The Control, and with stratospheric returns for so many ICOs — 82,000% for Ethereum, 56,000% for IOTA, 44,000% for Stratis, 21,000% for Spectrecoin — it’s no surprise that this summer through the end of 2017 marks the launches of at least 15 new crypto hedge funds.
Last September, when Olaf Carlson-Wee, the first employee of Coinbase (and the subject of this month’s cover story), founded Polychain Capital with $4 million (it now has $200 million in assets under management, with investment from Andreessen Horowitz, Founders Fund, Sequoia Capital and Union Square Ventures), he was early on the trend, but not the first.
Metastable Capital, founded by Lucas Ryan, Josh Seims and Naval Ravikant, the chief executive officer and cofounder of Angel List, was founded in the fall of 2014 and has $45 million in assets under management. Like Polychain, it follows a Warren Buffett-style buy-and-hold strategy and has so far “massively outperformed” bitcoin over that time period.
The same year saw the launch of a couple bitcoin funds. Tim Enneking ran an index-style Bitcoin fund, and veteran commodities trader Daniel Masters of Jersey-based Global Advisors launched an actively managed bitcoin fund, which last year saw returns of 71%. (Enneking also later set up a crypto trading fund offshore that he has since closed.)
Then, this spring, Blockchain Capital raised its third round to invest not only in blockchain startups but also tokens. The firm then tokenized $10 million of the $50 million fund, selling BCAP tokens to the public (but only accredited investors in the U.S.)….