(Bloomberg) — A few up-and-coming crypto market players are launching a hedge fund that will focus on a “long-only” strategy after receiving $85 million in funding from some of the industry’s most prominent supporters. .
Ryan Watkins, a 25-year-old former analyst at Messari Inc., and Daniel Cheung, 26, who worked at Jennison Associates LLC, said they formed Pangea Fund Management. They said they were backed by investors such as Bain Capital and ParaFi. Other participants in the funding round include Brad Burnham, co-founder of Union Square Ventures, Josh Harris, co-founder of Apollo Global Management, as well as “crypto natives” such as Do Kwon of Terraform Labs, Alameda Research and Kyle Samani of Multicoin Capital.
“Our thesis is that over the long term, there will be very few winners in every category” within crypto, Watkins said in an interview. “So for us, we much prefer to bet on some of the early winners that we see.”
According to Watkins, who joined market intelligence provider Messari in 2019, existing funds in crypto are divided into two categories: hedge funds that primarily trade Bitcoin and Ethereum, and venture capital funds that focus on start-up projects.
Pangea’s strategy is focused on taking long positions in three to seven established tokens, Watkins said, which makes the fund unique in today’s market when a lot of interest from crypto venture capitalists is focused on investing. in new projects.
“On the early stage side, every two weeks another $1 billion+ in funding is raised,” Watkins said. “They are all investing in private markets with inflated valuations.”
Watkins is an advocate of decentralized cryptography. He said concentrating the fund in a few tokens will also allow him to focus on supporting an important element of decentralization: project governance.
“As these projects begin to mature over time, for founders to credibly claim that their products are decentralized, they need to empower the community,” Watkins said. “But the only way that works is if you have community members to step in and take on leadership roles.”
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