December 20, 2017
By Jacqui Frank, Kara Chin and Trevor N. Cadigan - November 28, 2017 (www.businessinsider.com)
Ari Paul, CIO of cryptocurrency hedge fund BlockTower Capital, talks with Business Insider executive editor Sara Silverstein about the value in cryptocurrency and where he thinks the market is headed in the next two years. Following is a transcript of the video.
Ari Paul: I’m Ari Paul, CIO of BlockTower Capital and this is why there's value in cryptocurrency
Sara Silverstein: Why do you fundamentally believe that there is value in this cryptocurrency world?
Paul: So there are quite a few use cases. I think the biggest and clearest, and easiest to understand, is as a store of value that can't be censored and is resistant to seizure. And so, the really clear example of demand for this, that I see, is the offshore banking system. Which is roughly 20 trillion dollars today. And it's not just people trying to dodge taxes. Apple, Amazon, every billionaire on the planet, has wealth stored there. And firms like JPMorgan collect fees to offshore law abiding citizens’ wealth. And people want to store their wealth securely, in a way that no single judge could freeze all of their assets. Right? Amazon doesn't want their entire global business operation to be shut down by one judge in Brussels. They want to be able to go through a lengthy appeals process and keep their business operating. So cryptocurrency performs that same task of the offshore banking, of keeping wealth secure an order of magnitude better. So we see massive real fundamental demand for this use case.
Silverstein: And what other financial assets make sense to be on a decentralized database or why would they?
Paul: Yes, there’s a huge distinction between the money use case, store of value, and the blockchain use case, for other assets. And I think it’s useful to kind of separate those. So a blockchain makes a ton of sense to record in real-time legal title. So I was a treasury bond trader, for example, and an example in finance, that anyone who’s traded treasuries is familiar with, is: failure to deliver. So Goldman Sachs will sell a bond to Credit Suisse, who borrows it from JPMorgan, and the same bond, in a day, might trade across 12 banks. And if one back office fails, they fail to make delivery of that bond, you get what's called a cascading failure to deliver. Because no one knows who actually owns the bond. And that can take weeks to fix. So imagine if you just have a shared database, a database that each of those banks held, that was kept accurate in real time, and that no one could maliciously change or manipulate. You would know who owns what bonds and you might be able to eliminate half of the existing back offices in big banks. So a massive cost savings.
Silverstein: So you believe in the blockchain as having a value in the future for us? How does that translate into value for cryptocurrency?
Paul: So, yeah. I think a really useful idea — a blockchain is just a type of database. It's a distributed ledger that in some use cases, like for a banking back office, is kind of like a database upgrade. So massive improvements in efficiency, but probably not that transformative or disruptive. When you take a blockchain and you make it public and decentralized, and then you add money to that — you add a cryptocurrency — then you're looking at something that is that first use case, that offshore banking system, that I think is fundamentally disruptive. And disruptive financially, economically, and even potentially politically.
Silverstein: Do you see any institutional money in cryptocurrency right now, and is that going to be a huge lever for these values to all skyrocket?
Paul: Absolutely, so we've seen this really clear path of adoption. The earliest adopters were engineers, self-described cypherpunks. Then you had a wave of kind of Silicon Valley tech elites, people who would have a successful exit, who had a high risk tolerance, and who liked taking risk on new technology. Then you had kind of an early wave of maybe people like myself with a little more of a Wall Street background, as well as high net worth individuals, who are a little bit risk-tolerant. What we’re seeing right now is a shift from small family offices to big. Venture capital firms are basically all in. So most of the famous venture capital firms, not only have they been in the space for a few years, they’re now directly investing in new cryptocurrencies. And of the ten largest family offices in the country at least seven of them on cryptocurrency. Maybe more, but seven I'm sure of. So the next wave is — in kind of the institutionalization of the space — is we’re having the CME futures that are likely to launch next month. There's a huge number of entrants who want to invest in cryptocurrency, but can’t. For security reasons, operational reasons, regulatory, but they can easily buy a future, that's on the CME. So that opens the door to groups like endowments and pensions. So far, endowments and pensions own zero cryptocurrency. You have an asset that has been the highest returning asset class over the last eight years and it’s uncorrelated to everything else. And while there’s certainly debate over the future prospects, it lines up as the holy grail for a portfolio. In the sense that, if you size it appropriately, if you size it small, the risks are idiosyncratic. It actually reduces the risk of a portfolio. So endowments and pensions, as they get comfortable with the space, in all aspects regulatory, compliance, as well as underwriting investment risk. They're going to get in. And that's a massive wall of money coming in to a relatively small asset class.
Silverstein: And what do you think the timeline is for that?
Paul: I think the first endowment is probably going to write a check in the next few months, a small check. Endowments won't be in size for probably six months and not in size by — from their perspective for probably 12 months. Pensions are probably 18 months away and the key — the reason given those dates is having third-party custody, that is a legal qualified custodian, is a huge hurdle particularly for pensions. You have issues like ERISA, that are actual fiduciary challenges. And having a third-party qualified custodian, for many crypto assets, is probably something like 12 months away, maybe 18 months away.
November 29, 2017
By Josiah Wilmoth - November, 29, 2017 (www.cryptocoinsnews.com)
TechCrunch founder Michael Arrington has announced the creation of a $100 million hedge fund that will be denominated in XRP, the native token of Ripple.
Arrington made the announcement at the Consensus: Invest conference in New York, revealing that the fund will be called Arrington XRP Capital. Significantly, investors will buy shares of the fund and receive distributions in XRP, the native currency of the Ripple Consensus Ledger (RCL) and the fourth largest cryptocurrency by total market cap.
“A year ago I was just a crypto enthusiast,” Arrington wrote in a blog post that accompanied the announcement. “Now I’ve altered my career path to focus entirely on cryptocurrencies and related technologies. And this isn’t just a short term focus. With this new fund I’m signaling my intent to spend the rest of my career on cryptocurrencies. There will be dramatic ups and downs along the way, but we’re in this for the long haul.”
The CrunchFund founder wrote that he and the other founding partners of Arrington XRP Capital chose to denominate the fund in cryptocurrency rather than fiat to make it easier for cryptocurrency holders and foreign investors to participate in the fund. They chose XRP due to its “super-fast and secure settlement infrastructure,” which has also been adopted by financial services heavyweights such as American Express.
Arrington said that this feature is not a mere gimmick but will be an integral component of the fund’s operations:
“We’ll pay our own fees and salaries out in XRP as well. We want to “eat our own dog food” and be active users of crypto currencies in as many parts of our fund operations as possible, not just investors. This will make us better investors,” he wrote.
According to Fortune, the fund — which has raised approximately half of its $100 million target — will invest primarily in cryptocurrencies and initial coin offerings (ICOs), although it may obtain small equity stakes in blockchain startups.
XRP traded up on the news, briefly cracking the $0.30 barrier for the first time since June. At present, XRP is trading at $0.286, which represents a 24-hour increase of six percent and gives the cryptocurrency a market cap of $11.1 billion.
Featured image from Shutterstock.
By Rebecca Campbell - November 29, 2017 (www.cryptocoinsnews.com)
Billionaire investor and hedge fund manager Mike Novogratz has made the claim that ‘bitcoin will be the biggest bubble of our lifetimes.’
Speaking at a conference in New York on Tuesday, Novogratz explained that there is a lot of fraud in something that’s ‘exciting’ as the crypto market, reports CNBC, adding:
"I think this [crypto] is going to be the biggest bubble of our lifetimes by a long shot. To be fair, this is a bubble and there’s a lot of fraud mixed in. We look at tons of projects. And some get funded, and they literally look like Ponzi’s".
However, unlike critics who have said dismissed the digital currency as a speculative bubble, the former Fortress manager wasn’t using his bubble comment as a negative connotation. In October, during an interview, Novogratz was asked whether bitcoin’s gains constituted a bubble. Even though he replied in the affirmative, he added that this wasn’t necessarily a bad thing, adding:
"Historically, manias or bubbles happen around things that fundamentally change the way we live. If it’s the railroad bubble or the Internet bubble, it really changed the way we live".
He added that in 10 to 15 years the blockchain and decentralised systems would be in use everywhere, claiming that this bubble is ‘going to be the great manias of all time.’
Since October, bitcoin has not only scaled the $10,000 milestone, but it’s continuing upward trajectory has pushed it up to its current value of $11,147, according to CoinMarketCap, pushing its market total to $185.7 billion for the first time.
The comments from Novogratz, who has compared to bitcoin to digital gold, come at a time when he recently stated that bitcoin could ‘easily‘ reach $40,000 by the end of 2018. Furthermore, he was reported yesterday as saying that the digital currency market cap will reach $2 trillion at the end of next year. At present, it’s worth an impressive $339.1 billion, making it more valuable than Visa and the Bank of America. Slowly, but surely, it’s steadily gaining on the market cap of JPMorgan Chase, at $343 billion, who’s CEO called bitcoin ‘a fraud‘ in September.
However, while Novogratz believes that the cryptocurrency will reach $40,000 by the end of 2018. he doesn’t think that the journey will be smooth sailing.
"There will be wild crashes in it because you’re going to get to levels so far ahead of where the technology’s at. It makes investing really, really exciting, but difficult".
Since the beginning of the year, bitcoin’s value has, so far, increased by more than 1,000 percent.
Featured image from Flickr/Acumen.
By Rebecca Campbell - November 29, 2017 (www.cryptocoinsnews.com)
The vice president of the European Central Bank (ECB) has said that investors are taking a ‘risk’ by buying bitcoin at its high price.
Speaking to CNBC on Wednesday, Vitor Constancio, said:
"It’s a very particular asset, it’s a speculative asset by definition looking to the developments in its price. Investors are taking that risk of buying at such high prices".
Constancio’s comments come at a time when the digital currency is experiencing a surge in value. Earlier today, it was reported that bitcoin had risen to over $11,000 along with a rise in various alt-coin prices. To date, the cryptocurrency has increased by over 1,000 percent, a colossal undertaking considering it was trading at $1,000 at the beginning of the year, and has overcome numerous obstacles.
Some, though, are still expecting great things from bitcoin. Mike Novogratz, a billionaire investor and hedge fund manager, believes that it could ‘easily’ rise to $40,000 by the end of 2018. However, at a recent conference in New York, he stated that it wouldn’t be easy getting there, adding:
"There will be wild crashes in it because you’re going to get to levels so far ahead of where the technology’s at".
Central banks, though, have continually been reluctant to embrace the market. The ECB vice president said earlier this month that digital currencies will never replace the fiat system, adding that they were a ‘misnomer‘ merely used as a speculative asset.
At the time, he stated:
"The so-called private ‘cryptocurrencies’ can never prevail as general money substitutes".
Mario Draghi, the ECB President, has also spoken about the digital currency market, claiming that they aren’t ‘mature‘ enough for the central bank to consider regulating them. More recently, Draghi stated that they pose little threat to the central bank-dependent financial system, despite the rise in the cryptocurrency market.
Not only that, but Constancio believes that central banks don’t need to take the digital currency market seriously. During the interview, he said:
"… in the sense that we don’t have responsibility or even instruments that point to particular prices of particular assets, that is certainly not the role of central banks".
Yet, regardless of the fact that the crypto market, in particular bitcoin, have been criticised by various financial CEOs, it looks as though it has its foot firmly in the door and isn’t going away anytime soon. Not only that, but we may soon be reading headlines that the combined crypto market has become more valuable than JPMorgans.
Featured image from Shutterstock.
November 22, 2017
BY Bhushan Akolkar - November 22, 2017 (www.coinspeaker.com)
Renowned Bitcoin investor and crypto-hedge-fund manager, Mike Novogratz believes that Bitcoin can touch $10000 by the end of this year.
Legendary hedge fund manager and a billionaire trader – Michael Novogratz – is yet again seen pumping confidence in Bitcoin investors with his recent prediction.
It was just last month in October when Novogratz predicted Bitcoin to touch $10,000 in a time-frame of six months from then i.e. possibly my April 2018. However, these predictions were made before the announcement of Bitcoin-futures contract by CME group which catapulted Bitcoin prices to an unprecedented rally from over $5,500 to $8,000.
Now, in his recent interview with Bloomberg, Novogratz seemed to have turned more bullish than he was a month earlier and has reduced the time-frame of his previous to the end of this year. This means that as per Novogratz Bitcoin prices could touch $10,000 by this year-end.
Novogratz compared Bitcoin to an asset like gold calling it as the new ‘digital gold’ stating that “gold has value solely because people say it has value; bitcoin is built on an amazing technology, there’s a limited supply of it.
This whole revolution came out of a breakdown in trust in the 2008 crisis.” In addition to this, Novogratz also believes that the second-most popular cryptocurrency Ethereum will also surge considerably and trade above $500 by the year-end.
Mike Novogratz is very bullish on the future of Bitcoins and has established a $500 million Galaxy Digital Assets Fund which is the biggest-of-its-kind crypto-hedge-fund. The fund will focus on investing in the blockchain and cryptocurrency space looking to its revolutionary applications and a great future potential.
Novogratz’s hedge-fund has already started active investments in the blockchain space with its first investment in Worldwide Asset eXchange (WAX) which is a decentralized blockchain platform for the development of secure and transparent online in-game virtual item exchanges.
Following Novogratz’s comments, Bitcoin prices were seen shooting up again above $8300 after the prices fell by over 5.4% on yesterday’s news of $31 million worth Tether tokens getting stolen. Novogratz comments however instilled back the lost optimism in the market. It has to be noted though that Bitcoin has witnessed quite a bumpy ride in the past month with a huge volatility and price fluctuation.
According to CoinMarketCap, currently, it is trading at $8253.41 and is seen to be consolidating there. Commenting on the latest price fluctuations in Bitcoin prices, Novogratz said: “We’re in the second or third inning. Because prices have moved so far people are nervous. You made a whole lot of money, there’s news, so you want to book your profit and get out.”
The ambitious launch of $500 million worth crypto-hedge-fund marks Novogratz comeback as a prominent investor after suffering major losses at Fortress Investment Group LLC. Novogratz, who was away from Wall Street for over two years is back in action and is quite optimistic about the new blockchain revolution and the world of virtual digital currencies.
However, many of his peers from the Wall Street are quite skeptical about cryptocurrencies with some few prominent personalities like Jamie Dimon even calling Bitcoin as a big “fraud”. Neil Dwane of Allianz Global Investors said it’s a “scam for criminals around the world,” while Larry Fink of BlackRock Inc. said Bitcoin to be the best tool for money laundering activities.
Quickly pointing out to all his critics, Novogratz who is currently 52 said: “all of those guys are over 60 and I’m not. There’s some truth to that in that it’s difficult for someone who didn’t grow up in a digital world to understand that we’re moving into a digital world.”
In addition to Novogratz, there are several other prominent figures who have increased their targets for Bitcoin prices after the recent bull run. Standpoint Research’s Ronnie Moas has corrected his target second time this month from $11,000 to $14,000. There are several factors which can contribute to next upward journey for Bitcoin from here.
November 16, 2017
By Joseph Young - November 16, 2017 (www.cryptocoinsnews.com)
The bitcoin price has surpassed $7,500 today, on November 16, achieving $7,558 at its peak, as the market continues to demonstrate optimism around the rapid rate of adoption by leading financial platforms.
$15 Billion App Square’s Integration of Bitcoin
Earlier this week, Square, the $15 billion payments app development firm operated by CEO Jack Dorsey, the founder and CEO at Twitter, surprised its users with the integration of a bitcoin brokerage feature on its mobile app used by more than 3 million active users.
The development team of Square followed up the integration of its first bitcoin pilot with the following statement:
“We’re always listening to our customers and we’ve found that they are interested in using the Cash App to buy Bitcoin. We’re exploring how Square can make this experience faster and easier, and have rolled out this feature to a small number of Cash App customers. We believe cryptocurrency can greatly impact the ability of individuals to participate in the global financial system and we’re excited to learn more here.”
Square’s integration of a bitcoin brokerage service will soon allow the app and the company to compete with existing service providers in the bitcoin market, most notably Coinbase. Over the past few years, bitcoin wallets, trading platforms, and brokerages have grown exponentially in value and user base. Hence, in the mid-term, major financial platforms such as Square will likely begin testing the bitcoin market, given the rapid increase in demand for bitcoin and the cryptocurrency market in general.
$95 Billion Hedge Fund’s Entrance into Bitcoin
Almost immediately after CME Group’s confirmation in regards to its launch of a bitcoin futures exchange by the second week of December, $95 billion hedge fund Man Group revealed its plans to invest in bitcoin by the end of 2017. Man Group CEO Luke Ellis stated at the 2017 Reuters Summit that bitcoin will soon be added to Man Group’s “Investment Universe,” or a diversified portfolio of assets.
Managers and partners of large-scale hedge funds like Man Group are only permitted to issuing checks in the minimum value of around $300 million. Given such policy, in the mid-term, hedge funds and investment firms will invest at least billions of dollars in bitcoin, further increasing its liquidity and improving infrastructure surrounding the cryptocurrency.
Throughout this week, the market has remained highly enthusiastic and optimistic in regards to the short-term growth trend of bitcoin, considering that some of the world’s largest hedge funds will pour in billions of dollars in the market in the upcoming months.
George Kikvadze, the vice chairman at Bitfury, also stated that out of the 30 institutional investors he had met in the previous week, 12 are in the process of investing in bitcoin, 10 plan to invest in bitcoin in the short-term, and eight remain undecided.
While the bitcoin price has been relatively volatile over the past four days, by the end of this month, the $8,000 price target of highly regarded financial analyst Max Keiser seems realistic, given the adoption of bitcoin by major financial service providers and retail investors.
Featured image from Shutterstock.
November 16, 2017 (www.forex-ratings.com)
The cryptocurrency market cap reached a new all-time high on Wednesday amid a generally-bullish day of trading. The bitcoin price set the tone for the rally, surging nearly $500 to recover past the $7,000 threshold for the first time since its weekend correction.
The total cryptocurrency market cap entered the day at $208 billion, and it climbed gradually throughout Tuesday evening. On Wednesday morning, the rally began to acquire steam, enabling the crypto market cap to leap to a new all-time high of $217.1 billion.
Bitcoin Price Pierces $7,000
The bitcoin price posted a 7% recovery on Wednesday, enabling it to climb nearly $500 in the past 24 hours alone. Since November 12, when the bitcoin price briefly crashed as low as $5,519, the flagship cryptocurrency has recovered by approximately $1,500, bringing it ever closer to the high-water mark it set last week shortly after the SegWit2x hard fork was called off. The bitcoin price is now trading at a global average of $7,004, which translates into a $116.8 billion market cap.
Several factors have contributed to this rally, most notably the fact that Man Group, one of the world’s largest hedge funds, stated yesterday that the launch of bitcoin futures contracts will convince it to make bitcoin part of its “investment universe”. However, traders are likely also bullish on the fact that mobile financial services application Square Cash is testing bitcoin integration and has already rolled the feature out to some users.
Ethereum Price Tests $340
The ethereum price continued its slow — but steady — advance on Wednesday, climbing another 3% to a present value of $338. Ethereum now has a market cap of $32.3 billion, bringing the second-largest cryptocurrency to its highest point since mid-October.
Bitcoin Cash Price Retreats
Bitcoin and bitcoin cash have taken inverse trajectories in recent days, and that phenomenon repeated itself — in direction if not degree — on Wednesday. While bitcoin and nearly every other major cryptocurrency experienced gains against the dollar, the bitcoin cash price declined 4%, reducing it to a current value of $1,289. Bitcoin cash has a market cap of $21.7 billion, making it approximately two-thirds the size of ethereum.
Market Swells at the Seams
Wednesday marked one of the most comprehensive crypto market advances in recent weeks, with 88 of the top 100 cryptocurrencies ending the day in positive territory.
The ripple price increased by 2%, while the litecoin price added 6% to rise to $65. The dash price recovered by 5% following Tuesday’s pullback and is now trading at $437. NEO’s 6% increase enabled it to broach the $30 barrier once again, and the monero price rose 1% to $124.
The competition for the last two spots in the market cap top 10 has been fascinating to watch this month, as no cryptocurrency has been able to cement its place in this echelon of the rankings. Today, IOTA burst into the ninth spot with a 19% increase, while NEM maintains the 10th position with a 3% gain. That makes ethereum classic, now ranked 11th, the odd token out.
November 15, 2017
By David Dinkins - November 15, 2017 (cointelegraph.com)
Reuters reports that Man Group, a UK-based hedge fund, will be getting involved in Bitcoin trading if CME Group’s plans to open a regulated futures exchange are approved. According to Business Insider, Man Group is “one of the largest hedge funds in the world” and the fund’s website points out that they manage $103.5 bln in funds.
Even a fraction of $103.5 bln could make a big impact on the markets, but more important, Man Group’s announcement continues to solidify digital currency as being worth of Wall Street’s attention. Bitcoin in particular is finding more and more acceptance in traditional markets. Likewise, futures markets and hedge fund involvement create more on-ramps into the mainstream financial system and more ways for large but cautious investors to get involved.
Hedge funds are only open to accredited investors, that is, those whose net worth exceeds $1 mln. However, such funds have a much wider latitude to trade whatever types of assets or instruments it thinks would be profitable for its clients. Mutual funds, on the other hand, are open to regular retail investors but have greater restrictions as to how they can invest their funds.
The holy grail for retail investors would be an exchange traded fund, or ETF. A Bitcoin ETF would allow ordinary investors to easily gain exposure to Bitcoin by adding it to their brokerage or retirement accounts. Greater acceptance by Wall Street and greater liquidity on regulated futures markets, such as CME’s, will almost certainly usher in an ETF.
October 11, 2017
A former hedge funder thinks Bitcoin will hit $10,000 in 6-10 months and be 'one of the great manias of all time'
By Akin Oyedele - October 11, 2017 (http://www.businessinsider.com)
The Bitcoin bubble will continue blowing up until it inevitably pops, according to Michael Novogratz, a former manager at the $72 billion investor Fortress.
"It would not surprise me if, in the next six to 10 months, we're over $10,000," Novogratz told CNBC on Tuesday. Bitcoin traded near $4,823 per dollar at 11:31 a.m. ET on Monday, up 657% for the year.
At a recent meeting with institutional investors in San Francisco, he realized the "herd" was approaching to cash in on the booming demand for cryptocurrencies. The CEOs of major investment banks including Morgan Stanley and Goldman Sachs have recently commented publicly on bitcoin.
Novogratz is starting a $500 million crypto fund that invests in bitcoin, ethereum, and initial-coin offerings.
"Yes, it's a bubble," Novogratz said. "It's going to be one of the great manias of all time."
He said bubbles typically happen around things that that fundamentally change the way we live, like railroads and the internet.
"We could never have understood the ubiquity of the internet in 2017 even at the height of the bubble," Novogratz said. "Ten years, 15 years from now, blockchains and decentralized systems will be everywhere."
Bitcoin is the bellwether of this "decentralized revolution" and is the easiest way for investors to get exposure, Novogratz said. He's betting that the underlying technology of bitcoin, which creates a decentralized and permanent ledger of every transaction made on the network, will thrive into his four kids' adult lives.
"One day their boyfriend's going to give them digital flowers and they're going to enjoy the flowers," Novogratz said. "My mom would say 'I want real flowers.' As we move into a digital world, having a digital store of value makes more and more sense."
Akin joined Business Insider in 2014. He previously wrote for Bloomberg News. He studied at Columbia Journalism School and the University of the Witwatersrand in Johannesburg.
September 27, 2017
By Frank Chaparro - September 27, 2017 (markets.businessinsider.com)
|Michael Novogratz, President of Fortress Investment Group, speaks at the annual Skybridge Alternatives Conference (SALT) in Las Vegas May 6, 2015. REUTERS/Rick Wilking|
The explosive growth of the cryptocurrency market has converted Mike Novogratz, a former manager at Fortress, the $72 billion money manager, into a bitcoin evangelist.
And now he's reportedly raising $500 million for a new cryptocurrency hedge fund, according to Bloomberg News.
The new fund would represent a sort of come back for Novogratz, who left Fortress in 2015 after the $2.3 billion fund he managed failed to deliver returns for its investors.
Novogratz declined to comment about the crypto-fund during an interview with Bloomberg TV, but a person familiar with the matter told Bloomberg Novogratz will put up $150 million of his own money and seek out additional cash from "family offices, wealthy individuals and fellow hedge fund managers."
Still, Novogratz did admit to Bloomberg that there are plenty of opportunities to make money in the cryptocurrency space.
“This is going to be the largest bubble of our lifetimes,” Novogratz said to Bloomberg. “Prices are going to get way ahead of where they should be. You can make a whole lot of money on the way up, and we plan on it.”
Already, the billionaire actively trades bitcoin himself.
“I sold at $5,000 or $4,980,” he told Bloomberg. “Then three weeks later I’m trying to buy it in the low $3,000s. If you’re good at that and you’re a trading junkie, it’s a lot of fun.”
The so-called Galaxy Digital Asset Fund would be the largest cryptocurrency fund, according to Bloomberg. But it would not be the first. Autonomous NEXT, a financial technology analytics firm, has been keeping track of all the crypto funds out there and at last count there are at least 75 in existence.
Lex Sokolin, a partner at Autonomous NEXT, told Business Insider the firm estimates total assets managed by such firms to stand somewhere between $1.5 and $2 billion.
"Like wild mushrooms, crypto hedge funds have been taking root in the volatile and unregulated soil of the crypto economy," Autonomous NEXT said in a post on their website.
Many of the firms sport crypto-themed names such as Ether Capital, an homage to the token powering the ethereum blockchain, and Medici Crypto.
The meteoric rise of digital currencies such as bitcoin, which is up nearly 570% since 2016, and ether, which is up 2,100% over the same period, has drawn the attention of Wall Street. On top of this, the market for initial coin offerings, a fundraising method based on blockchain technology, is exploding with over $2 billion raised via ICOs since the beginning of the year, according to Autonomous NEXT.
Even traditional hedge funders are paying attention.
"We have seen managers invest in the actual currencies and/or in the ICOs, and soon there will be derivatives as well,” Steve Nadel, a hedge fund attorney, and partner at Seward & Kissel, said in an email sent to Business Insider.
"Cryptocurrencies have garnered a fair amount of interest in the investment management space, primarily because of the returns they have recently shown," he said.