BlockTower Capital, a digital currency hedge fund launched in August, raised $140 million and hired a former vice president at Goldman Sachs Group Inc., expanding its team to eight people, according to people familiar with the matter.
The money manager, which is based in Stamford, Connecticut, has raised capital from family offices and other institutions such as venture capital firms, the people said.
Union Square Ventures LLC and Andreessen Horowitz separately said they are investors and declined further comment. BlockTower declined to comment through a spokeswoman. The company recently informed investors that its flagship fund closed to new capital as of Jan. 1, according to an email viewed by Bloomberg News.
BlockTower also hired Michael Bucella, who joined Goldman in 2008 and most recently worked in multi-asset sales for Canada, as head of strategic partnerships and business development, according to the people.
BlockTower’s launch comes amid an outpouring of interest in cryptocurrency markets, fueled by the explosive appreciation of bitcoin, which soared to a high of $18,674 in December from less than $1,000 at the end of 2016. There are now about 100 crypto-focused funds with assets of more than $2 billion, with more growth expected this year, according to a Dec. 18 report from Morgan Stanley.
While skepticism persists about market values and regulations, institutional investors are finding it easier to speculate in digital coins, which number in the thousands. Cboe Global Markets Inc., one of the world’s biggest regulated exchanges, began offering bitcoin futures contracts last month and Goldman Sachs was one of the firms clearing trades for certain clients.
The company Hedge Fund Research last month launched an index tracking funds investing in blockchain technology and cryptocurrencies that it said was up 1,500 percent through November. A separate index focused on just currencies was up 1,600 percent in the same period, it said in a release.
BlockTower was started by Matthew Goetz, a former engineer who worked in investment management at Goldman Sachs for 11 years, and Ari Paul, a portfolio manager who oversaw risk at the University of Chicago’s endowment investment office. Goetz is the chief executive officer and Paul is chief investment officer.