Cryptocurrency hedge fund BlockTower Capital has managed to raise $140 million in client funds. The fund, which started in August, closed to new investors on January 1st.
Investors in the Connecticut-based fund include family offices and venture capital firms. Two big names which have identified their involvement are Union Square Ventures LLC and Andreesen Horowitz. Union Square Ventures are one of the highest performing venture capital firms in the world, while Andreesen Horowitz and its cofounder Marc Andreesen have won multiple accolades, including ranking number 6 on Vanity Fair’s 2011 New Establishment List and number 1 on CNET’s 2011 list of most influential investors.
Hiring Ex-Goldman Sachs Executives
BlockTower Capital have also expanded their team to eight, including Michael Bucella, a former vice president at Goldman Sachs, who will head up strategic partnerships and business development. Speaking on his appointment Bucella said, “I am eager to leverage my experience to further the growth of BlockTower through global expansion of its strategic partnerships,” adding that he was “thrilled to join a firm with a unique investment philosophy… and brand reputation across the entire crypto-ecosystem.”
Based in Connecticut, BlockTower Capital was founded by another Goldman Sachs alumnus, Matthew Goetz, and Ari Paul. Paul was in the news recently after he predicted that Bitcoin’s notorious price volatility would continue into 2018, believing that it would trade at both $4,000 and $30,000 during the year. It was also revealed that he had put a million dollar bet on Bitcoin hitting $50,000 with an out of the money option call.
2017’s remarkable explosion in cryptocurrencies has brought about a surge of institutional interest. According to a client report from Morgan Stanley entitled “Bitcoin Decoded”, there are now around 100 hedge funds in the space, controlling more than $2 billion in assets.
The listing of futures contracts on the Cboe and CME is widely-thought to have been crucial in solidifying this interest from the financial mainstream. Derivatives like futures contracts, and ETFs, should any be forthcoming, are preferable to institutions who prefer not to hold the currencies themselves.