Wondering who the top cryptocurrency fund managers are, specifically those that have been achieving the highest returns over a multi-year period with the challenging current market?
Crypto shares similar excitement to startup investing, but instead of equity as the asset you have a token. I get excited when placing a trade, in an individual firm's equity in it's infancy. Crypto has given me that same excitement about potential returns and value the network could bring.
I can relate to not having enough time to properly research every individual investment pick I want to make. There’s only so much time in the day. I enjoy the due diligence process, analyzing, then making a commitment. But sometimes I rely on a fund manager to make sure I properly diversify. I started this list of blockchain angel investors and fund managers with the intent to get feedback to grow it. I start with the Syndicates of founders of crypto investing portals, move to larger funds with higher minimum investments, then review my selection process.
Invest Direct - STO/ICO Investing Portals
Investing during the private stage can lead to a discount to the listing price. If you're familiar with an IPO or Initial Public Offering and the benefits to getting access early before the public can have a material impact. Initial Coin Offerings or ICOs can have a similar outcome for you so if you are looking to invest direct into initial coin offerings in their earliest stages, and avoid the fees of funds, I wrote another piece detailing how to invest direct into a single cryptocurrency through a platforms focused on initial coin offerings. Some of the founders of these portals run their own funds or Syndicates, so we start with them.
Brian Tubergen Chief Product Officer and Co-Founder of @CoinList. He Built AngelList's online fundraising product and Co-founded CoinList with Graham Jenkin - COO, Joshua Slayton (no title on LinkedIn besides Founder & previous founding CTO at AngelList), and Paul Menchov CTO. His Syndicate does not focus on just Crypto focused companies. Check out his Syndicate >
Paul Menchov Co-Founded @Republic as well as @CoinList where he now acts as CTO teaming with Brian. He also had a hand helping to build AngelList and Zynga after he studied Computer Science at Cornell. Paul appears to be less active than Brian in running his syndicate with only 2 deals per year and no detail on typical LP investments. Check out his Syndicate >
SeedInvest / Circle Team
SeedInvest offers a few funds that blend access to some crypto as well as startups. Ryan Feit and Brad Harrison. Ryan Feit is the CEO and Co-Founder of SeedInvest, which was acquired by Circle as they went deeper into the Crypto market. Brad Harrison focused on the Funds starting with Scout Ventures.
Hedge Funds & Venture Leaders
We start with a list of those managers noted for their innovative approaches to sourcing investment opportunities and structure of fund.
Maybe you are not a geek like myself and are willing to rely on someone else that may have more expertise. If that is the case and you're willing to pay more for someone else to build and maintain your portfolio of crypto.
Below are the fund managers based in the USA focused on blockchain and cryptocurrency. Ordered by size of fund managed, starting with the largest funds, by Assets Under Management (AUM). As you provide feedback we will continue to make updates to the list.
- $50 Bil Barry Silbert is the founder of Grayscale, now Digital Currency Group (DCG). He is a pioneer in the space. With a background in finance and a fruitful career as an investment banker in New York. In 2013, he started a Bitcoin investment fund, seeded with $2 Mil from SecondMarket, a investment technology firm he founded and later sold to Nasdaq. Based in Stamford, CT. They built Genesis Global Trading a crypto trading, lending, and asset custody platform, targeting institutional clients.
- 7.6 Bil Chris Dixon runs A16Zs Crypto Operations. $2.2 Bil in Fund III and $4.5 Bil in their latest fund. They have a Long-term focus able to hold investments for 10+ years. planning to invest consistently over time, regardless of market conditions. They have an 80+ person a16z operating teams. The operating teams have deep expertise in executive and technical recruiting, regulatory affairs, communications and marketing, and general startup management. They focus on governance of companies and the networks. He is previously cofounder of Founder Collective, SiteAdvisor, and Hunch. He holds a BA and MA in Philosophy from Columbia and an MBA from Harvard.
- 6.6 Bil Olaf Carlson-Wee of PolyChain Capital. Olaf is the founder and Chief Investment Officer of Polychain Capital. He is the former Head of Risk at Coinbase, the largest bitcoin company in the world, where he was the first employee. He received a BA in Sociology from Vassar College after completing his thesis on distributed networking and financial cryptography.
- $4.5 Bil Joey Krug at Patnera Capital: An investment firm focused exclusively on ventures, tokens, and projects related to blockchain tech, cryptocurrency, and crypto assets. Joey co-managed the Pantera ICO and Digital Asset funds and decentralizing prediction markets via Augur to make the best possible forecasting + derivatives tool. Pantera offers exposure to new, efficient, and scalable protocols.
- $1.3 Bil (2021 end) Hunter Horsley CEO, Board Director of Bitwise. Bitwise provides regular industry commentary on their website, monthly updates on re-balancing of the Bitwise 10 index, and longer thoughtful, well-researched, reports such as “The Case for Crypto In An Institutional Portfolio” published in May 2018. Hunter was previously Product Manager on monetization at Facebook and Instagram. Received his BS in Economics from the Wharton School of the University of Pennsylvania.
- $542 Mil Charles Cassel and Jonathan Binder founders of Coinsilium Group – Provides seed capital to developers for blockchain technology and fintech businesses. They support early-stage blockchain technology companies and the digital token economy; they were the first global blockchain accelerator to IPO in 2015. Based in Florida
- $230 Mil (2021 year end) Ryan Radloff, CEO of Coinshares, previously Global Advisors. Coinshares claims to be the largest issuer of cryptocurrency Exchange Traded Notes ETNs, and to have launched the first bitcoin (BTC) based securities. They made an announcement of crossing $5bil AUM April 2021 but year end statement seems to imply major net outflows.
Blockchain technology innovation is rapidly proliferating across the financial industry and fund manager classes. The technology is playing an impressive role in both front office and investment functions such as in the securing of crypto assets, considering the trading infrastructure and high demand.
Selecting a Fund
When I decide on using a fund, I still do my research to pick the best one. Here are the main things I look at:
I will try to pay the lowest fees I can. A common fee structure is 2 and 20. The fund charges 2% of invested assets and also takes 20% of the investment returns earn above a certain benchmark. If you are going to pay a fee we want it to be worth it with someone who runs a portfolio that outperforms the market over years and years.
Newer funds, which tend to be more innovative and are interested in attracting investors, tend to charge less. So, I would probably go to the newer fund. Some funds charge smaller fees when people invest more. So, I look closely at fee tables. Often times the fees can be challenging to understand. Fees are a significant consideration for me, because the way they compound eating away at my money, or returns.
Assets Under Management (AUM)
I don’t put much importance into whether a fund is popular at a given time, because I don’t want to invest my money by following the herd. There was a period of high speculation in crypto, so some of the funds are shrinking in size.
Returns / Track Record
Finding the performance history of private funds can be challenging. I suggest reviewing financial analytics offerings for you to analyze the fund performance and returns on each. They may offer their services free for a limited period, but the typical subscription can be pricey so may be prohibitive to retail individual investors. I am sure you already realize, but past performance is no guarantee of future results.
Structure of the Fund
Funds often come with restrictions about how its investors participate, so I have to find one that is consistent with my needs. I make sure to understand things like the minimum investment requirements, the minimum holding time, redemption restrictions and other stipulations that kick in.
How ingrained in the ecosystem is the fund manager and what did they do prior to the fund? The power of a community is better knowledge and wisdom, as well as direct access to those who are building new entities. Their direct experience and relationships have valuable.
What is Next?
Work with your individual Financial Advisor to ensure your investment process and decisions are sound. When you have ran through your process and decided on a fund there are some additional areas you can achieve greater returns through tax savings.
Save with Tax Advantaged Accounts
Individual Retirement Accounts (IRAs) let you invest in an account setup to lower your overall tax burden. A new set of IRA organizations are making it possible to place investments in startup equity, coin offerings, and crypto funds. When the returns are outsized from these risky asset classes like crypto and venture this can be a material amount saved. With this type of account you can make contributions and your investment earnings grow tax deferred until retirement. You can improve the overall return if you are willing to wait for retirement, with time and compounding on your side you can watch your investment grow along side your traditional accounts that do not have this benefit.
We started to partner with RocketDollar via their Self Directed IRA and 401k product offerings. With their solution you can can invest in any asset class allowed by the IRS which includes startup equity and crypto.
Anyone missing? Who do you think should be on this list? Let us know in the comments below or feel free to Contact us.