Venture Capital Firms Increasing Exposure to Digital Assets in 2024
The venture capital industry is preparing for portfolio rebalancing in 2024, with investors looking to increase their exposure to digital assets during the next bull market. For example, Blockchain Capital recently closed two new funds worth $580 million, which will be invested in crypto gaming and decentralized finance projects. Similarly, SkyBridge Capital, Atlas Merchant Capital, and Vector Capital are among the final bidders to acquire SVB Capital, the venture arm of Silicon Valley Bank. SVB Capital is known for backing major venture capital firms in the crypto space like Sequoia and Andreessen Horowitz.
Mainstream Financial Giants Launch Bitcoin Investment Products
Bitcoin-based investment products from mainstream financial giants are gaining popularity. Nomura, Japan’s largest investment bank, recently launched a new Bitcoin fund through its subsidiary Laser Digital. The fund is designed for institutional investors who want to cater to the growing demand for Bitcoin exposure.
Newcomers Attracting Funds in the Crypto Space
A number of newcomers in the crypto space are also attracting significant funds. Web3 startup Bastion recently disclosed a $25 million seed round led by Andreessen Horowitz and other prominent investors. Bastion aims to bridge Web3 infrastructure into enterprise technology.
SVB Capital Bids, Blockchain Capital Funds, Hut 8-US Bitcoin Merger, and Citigroup’s Private Blockchain
This week’s Crypto Biz explores various topics including the bidding process for SVB Capital, the closing of new funds by Blockchain Capital, the planned merger between Hut 8 and US Bitcoin, and Citigroup’s private blockchain solution.
Scaramucci Leads Bidding for Silicon Valley Bank VC Arm: Report
SkyBridge Capital and Atlas Merchant Capital, led by Anthony Scaramucci, are competing with Vector Capital to acquire SVB Capital, the venture arm of Silicon Valley Bank. SVB Financial Group, the former parent company of Silicon Valley Bank, is close to finalizing a deal to sell its venture capital arm. The sale is expected to be between $250 million and $500 million, pending review by the creditor’s committee. SVB Capital backs major venture capital firms in the crypto space, such as Sequoia and Andreessen Horowitz.
Hut 8 Receives Approval for US Bitcoin Merger
Hut 8, a Canadian Bitcoin mining firm, has received final approval from the Supreme Court of British Columbia for its planned merger with US Bitcoin. The merger will create Hut 8 Corporation, or “New Hut,” a publicly traded business based in the United States. The merger will provide access to 825 megawatts of capacity across six Bitcoin mining and data center facilities. New Hut plans to list its shares on the Nasdaq and Toronto stock exchanges.
Blockchain Capital Closes Funds for Crypto Gaming and DeFi Investments
Blockchain Capital has closed two new funds totaling $580 million for investments in infrastructure, gaming, decentralized finance (DeFi), and consumer and social technologies. The funds include an early-stage fund and an opportunity fund that serves as an entry point for companies that have already attracted funding. The funds will prioritize specific projects but will not invest in artificial intelligence-related projects or act as a hedge fund.
Citigroup Launches Citi Token Services for Institutional Customers
Institutional clients can now access cross-border payments, liquidity, and automated trade finance solutions through Citigroup’s private blockchain called Citi Token Services. Citi Treasury and Trade Solutions is licensed in over 90 countries and has completed two successful pilot programs. The services provided by Citi Token Services include instant payments to service providers via smart contracts, replacing bank guarantees and letters of credit. Another pilot program enabled clients to transfer liquidity between Citi branches, reducing frictions related to cut-off times and service gaps.
Hot Take: Venture Capital Firms Embrace Digital Assets in Anticipation of Bull Market
Venture capital firms are preparing for a shift in their portfolios as they position themselves to increase exposure to digital assets during the upcoming bull market. This trend is evident in recent developments such as Blockchain Capital closing new funds for crypto gaming and DeFi projects, and mainstream financial giants launching Bitcoin investment products. Additionally, newcomers in the crypto space are attracting significant funding, indicating growing interest and confidence in the industry. As the market continues to evolve, it is crucial for investors to stay informed about key developments, including SVB Capital bids, the Hut 8-US Bitcoin merger, and Citigroup’s private blockchain initiatives.
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