A new company called Polychain Capital has raised $10 million in capital for a hedge fund made up of cryptocurrencies such as bitcoin. Led by former Coinbase employee Olaf Carlson-Wee, they believe investors can gain significant returns by investing in digital assets.
Carlson-Wee was one of Coinbase’s first employees. He launched Polychain, a multi-cryptocurrency investment fund, this past September.
In a blog post earlier this year, Union Square Ventures partner Albert Wenger likened these digital assets (coins or token) to tickets needed to go on rides at a fair — but in this case, the ticket also has a value and so you can also simply trade it as you would a stock or other investment. Marc Andreessen is notably bullish on Bitcoin and Blockchain.
Brad Burnham, partner at Union Square Ventures, said Carlson-Wee:
“…understands how to look at and evaluate tokens and determine which tokens are most likely to appreciate in value.”
This year digital assets like bitcoin and ether have greatly appreciated in value and Polychain says it is:
“…committed to exceptional returns for investors.”
Furthermore, the company’s no-frills website also claims portfolios of Blockchain assets will be actively managed.
The former head of risk manager for Coinbase said he believes in the current constellation of cryptocurrencies, telling Forbes:
There will be many types of assets codified into the Blockchain, and they are all not just going to be on the Bitcoin Blockchain — it’s going to be a number of different assets here. And the best way to invest in that is with a diversified portfolio.
Digital Asset Funding Vehicles Will Be in High Demand
Carlson-Wee’s Polychain hedge fund is not the first out of the blocks – Pantera Capital and three other firms have been offering Bitcoin investment funds for quite some time. And another similar project covered at Blockchain News called Melon, designed by Parity (Ethcore) founder Gavin Wood will be a decentralized asset management for multiple Blockchains.
With big backers such as Andreessen Horowitz and Union Square Ventures Polychain definitely has added a whole new level of credibility for the Initial Coin Offering scene.
Carlson-Wee explained to author Laura Shin from Forbes that digital assets will be in high demand.
“For the first time, open source, peer-to-peer protocol developers can monetize their project on a protocol level,” explains Carlson-Wee. “Demand for the tokens increases because you need the tokens to participate in the network. And as that demand increases, because the supply of tokens is scarce and fixed, the price goes up. So it acts sort of like equity in a startup to incentivize the founder and employees, but it’s really monetizing an open source peer-to-peer protocol, not a company.”