Billionaire Marc Andreessen Backs Cryptocurrency-Focused Hedge Fund

Billionaire internet pioneer and software engineer Marc Andreessen is a key investor in Multicoin Capital, a cryptocurrency-focused hedge fund. 

The firm, which launched in October 2017, has increased its fundraising goals for the year, according to a report by Coindesk. Upon launch, Multicoin said it had planned to raise up to $100 million by the end of Q1 in 2018. That target has now been upped to $250 million by the end of this year.

Multicoin Capital has reportedly already collected $50 million from a broad pool of investors. Andreessen is the co-founder and general partner of venture capital firm Andreessen Horowitz. (See also: Blockchain-Based ‘Internet Computer’ Gets $61M from Andreessen Horowitz and Polychain.)

Multicoin aims to bring a traditional fund perspective to the world of cryptocurrency. “There’s been a torrent of interest in Multicoin Capital, validating the overwhelming need for professional fund managers that understand the market,” said co-founder and managing partner Kyle Samani.

These investors include Andreessen, as well as a number of other prominent individuals and firms, including Passport Capital, Vy Capital, Chris Dixon, Adam Zeplain of Mark VC, and Ari Paul of Blocktower.

A Technology-Driven Approach

There are a growing number of cryptocurrency-focused hedge funds, and Multicoin is aiming to set itself apart from the crowd. The company has presented itself as bringing a technology-driven methodology to its investment decisions, selecting token prospects with the assistance of algorithms and systems typically used in the broader quant fund world. (See also: The Rise of the Crypto Hedge Fund.)

Samani has indicated that his fund will “invest in tokens, not companies. And tokens, unlike companies, require new tools to operate at scale.” As the world of cryptocurrencies continues to change with regard to investor interest and regulatory oversight, managers like Samani are tasked with constantly updating and revising their strategies.

The fund is reportedly growing quickly. In December 2017, Civic founder Vinny Lingham joined the firm as a general partner. Nonetheless, in spite of ambitious fundraising goals for the quarter and the year, Multicoin Capital still has a good deal more to earn before it achieves its aims. At the same time, broad concerns about the long-term health of the cryptocurrency may prompt other money managers considering the launch of a cryptocurrency-linked hedge fund to pause for a moment.

Investing in cryptocurrencies and Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns bitcoin and ripple.

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