Several big investment firms said yesterday (Tuesday) that they are buying stakes in a Bitcoin hedge fund – yet another sign that major players in the investing world are getting serious about the digital currency.
Fortress Investment Group, with about $58 billion in assets under management, along with venture capital firms Benchmark Capital and Ribbit Capital, are teaming up with San Francisco-based Pantera Bitcoin Partners LLC, a hedge fund operator that buys and sells digital currencies like Bitcoin.
Pantera reported in a December filing that its Bitcoin hedge fund was worth $147 million, nearly three times the size of another major U.S.-based Bitcoin hedge fund run by SecondMarket.
Pantera Chief Executive Officer Dan Morehead said his company, which was founded in 2003 as a macro hedge fund operation, has completely shifted its focus to digital currencies.
"We're very excited about the promise of Bitcoin and how it can transform the way we move money," Morehead told The New York Times. "The promise and possibilities here are very broad."
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The investment by Fortress in the Pantera Bitcoin hedge fund isn't a huge surprise, as the firm had already bought $20 million worth of bitcoin last year. Undeterred by the recent decline in Bitcoin prices, Fortress is taking a longer view.
"In our business, we closely follow developments in trading, exchanges and global commerce, and we see potential for the broader adoption of Bitcoin and related technologies to reshape the global payment space," Michael Novogratz, a Fortress executive, told the Financial Times.
The Bitcoin hedge fund partnership is the second major development in the past two weeks revealing a growing interest in the digital currency on the part of professional investors.
Last week telecommunications provider Perseus Telecom and digital currency trading platform Atlas ATS launched a globally integrated Bitcoin exchange system in New York, Hong Kong, and Singapore.
Perseus is providing high-bandwidth lines that will allow investment firms to conduct high-frequency trading in Bitcoin, much as they do with stocks.
What do you make of increasing attention that Bitcoin is getting from major investment professionals? Do you think Bitcoin is getting closer to going mainstream? Tell us on Twitter @moneymorning or Facebook using #bitcoin.
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- The New York Times:
Fortress, Benchmark and Ribbit Buy Stake in Pantera Bitcoin
- Financial Times:
Fortress Rolls Bitcoin Stash into $150m Hedge Fund
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.