Blockchain Bites: The Rise of the Bitcoin Investment Fund

Three stories

1. Qualified investors are plowing money into cryptocurrency-focused investment funds. Yesterday, macro trader Dan Tapiero, most known for his DTAP Capital fund and eye for gold, announced a new $200 million fund called 10T Holdings that will make bids on crypto startups.

  • CrossTower, a Bermuda-based capital markets firm, is launching a bitcoin (BTC) hedge fund that will compete against Grayscale’s Bitcoin Trust (GBTC). The firm has $20 million in assets under management from early investors, with minimum buy-ins set at $100,000. (Grayscale and CoinDesk are both owned by Digital Currency Group.)
  • Meanwhile, Stone Ridge Asset Management’s existing bitcoin unit, NYDIG, could see more than $25 billion worth of bitcoin under management, based on current demand. NYDIG currently manages $6 billion in bitcoin for 280 institutional clients, CEO Ross Stevens said at a MicroStrategy event yesterday.
  • But is this the right time to crowd into crypto? In other words, are we at a market top? Well, famed rapper and entrepreneur LL Cool J (along with Paul Tudor Jones and others) signed onto North Island Ventures’ new $72 million fund.

2. PayPal’s cryptocurrency business has beat expectations, according to CEO Dan Schulman during the company’s Q4 earnings call. Launched late last year, PayPal’s (PYPL) crypto services – buying, selling and transacting – volumes have “greatly exceeded” the firm’s initial projections.

  • Customers who purchased crypto through the platform have been logging into PayPal twice as often as they were before buying crypto, the company said in its investor update. PayPal gained 16 million new active users since launching crypto, though there may not be a direct causal relationship.
  • PayPal Chief Financial Officer John Rainey didn’t deny the possibility of M&A deals in the crypto space while prices are high, but called it part of a “multi-year” strategy. Notably, PayPal’s spending in technology increased year over year by more…

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