It may have lost much of its euphoric luster mood in 2018, but that doesn't mean that the crypto space has been abandoned by institutional investors. Quite the contrary: according to Fortune, none other than billionaire Steve Cohen has decided to join the bitcoin party and has invested in a Autonomous Partners, a relatively new hedge fund that is acquiring both cryptocurrencies and blockchain-related companies.
Autonomous Partners, led by early cryptocurrency adopter and venture capitalist Arianna Simpson, launched in December and includes funding in the low eight digits from investors such as Coinbase CEO Brian Armstrong, Union Square Ventures, and Craft Ventures.
“I’ve only brought on partners that I think can be very much value-add beyond their capital,” Simpson told Fortune. And one of them is Cohen, who made the investment through his Cohen Private Ventures.
For now Autonomous is focusing on areas where it sees long-term need that it believes will outlast the recent spate of regulatory uncertainty in the space. As such it is investing in cryptocurrencies that serve as general purpose money and companies that are building the next generation of financial infrastructure. The firm also dedicates a small percentage of its fund to large cap cryptocurrencies such as Bitcoin and Ethereum, though she said that she is "also looking at what is the next generation," adding that investors can easily access those well-known coins on their own.
“It’s still up in the air if people want to do a number of thing on the blockchain. We’re still figuring out what needs one and what doesn’t,” she said. “But It’s clear they want to trade, and they want to play games.”
The launch of Autonomous Partners comes amid a burst of blockchain-related projects including ones to track diamonds, streamline cross-border payments, and implement loyalty programs, according to Fortune. In some extent this has backfire, as this panacea-like image has raised questions about whether the hype has overshot the technology’s current capabilities.
“It was a bubble, and I feel that way about blockchain,” Apple Co-Founder Steve Wozniak said Tuesday, comparing blockchain technology to the dot com bubble.
Simpson, however, disagrees believes that blockchain will be a long term winner even though for now it remains a generally nebulous product as regulators add more guidelines on how the industry should operate. “I think the whole space is still waiting for a bit more clarity,” she said.
Meanwhile, as Bloomberg adds, crypto-dedicated funds have taken off recently, capitalizing on the recent wave of cryptocurrency euphoria, which however appears to have busted in the past 6 months with bitcoin tumbling more than 70% from its December 2017 highs of just shy of $20,000.
Furthermore, of the 249 crypto funds that have opened, 70 percent did so last year, according to Autonomous Research. And yet, despite this year’s collapse in cryptocurrency values, hedge fund managers and other investors have continued to wade into the asset class.
And now that Steve Cohen, the man who was the face of the hedge fund industry for much of the past 20 years, is also allocating capital, it is only a matter of time before others jump, potentially leading to the next, 3rd bubble in the volatile asset class.