Polychain Capital raised $ 175 million to create a cryptocurrency venture capital fund

California-based Polychain Capital, which is considered the largest hedge fund in the field of cryptocurrencies, has raised $ 175 million, which, however, will be used to create a venture capital fund. This writes Bloomberg .

The new fund will have a seven-year limit on the withdrawal of capital and, as Olaf Carson-Wee, the company's CEO, stated, the proceeds will be spent on acquiring stakes in cryptocurrency projects facing problems.

As the newspaper notes, in 2018, Polychain became the first hedge fund in the cryptocurrency space, the size of assets under its management exceeded $ 1 billion. However, amid falling markets and the collapse of funding mechanisms like ICO, many companies have to revise their strategies, preferring namely venture investment.

So, the data of the Eurekahedge Crypto-Currency Hedge Fund Index say that since the beginning of 2018, 42 cryptocurrency hedge funds have closed. About 740 funds continue to work, however, their losses for the last year averaged about 70%.

“This asset class has always been extremely volatile. Its growth was spasmodic – after a very rapid growth comes bear market. When I launched Polychain Capital, I was ready for this, ”the head of Polychain Capital Finance Magnates quotes.

As noted by Carlson-Vie, investors should no longer rely on quick profits, as was the case during the heyday of ICO, and recommends targeting long-term investments.

According to Crypto Fund Research, in 2018, 125 venture capital funds and 115 hedge funds were launched, and this was the first time this ratio was on the side of venture capital investors.

“There is a large number of opportunities to buy shares in problem projects. Often, they can be bought even below the market value of companies, ”said partner and portfolio manager of Arca Funds, Jeff Dorman.

Multicoin Capital Managing Partner Kyle Samani also notes that hedge funds are being quietly converted into venture funds. According to him, this is due to the fact that their portfolios are losing in price and a very large proportion of assets under management becomes illiquid.

Recall, according to the Diar report , in the first three quarters of 2018, venture capital investments in blockchain- and cryptocurrency start-ups amounted to $ 3.9 billion, which is 280% more than in 2017.

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