Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

In June this year, the legendary silicon investor, Andreessen Horowitz, raised $2.2billion for his new crypto fund. However, the interest in cryptos as an asset class continues to expand. Founder of Coinbase, Fred Ehrsam, and his partner Matt Huang, have just raised $2.5billion for a new fund, called Paradigm Two, which will be investing in companies exposed to digital assets.

In 2018, Ehrsam launched his first fund, Paradigm One, and raised an initial $400 million which, according to the FT, has grown to be worth over $10billion. Ehrsam stated: “The biggest companies in the world are large internet tech companies powered by network effects. We think decades into the future it’s very clear the largest entities in the world will be powered by tokens.” Although Blackrock is the biggest asset manager globally in terms of funds undermanagement, to give this some context, Paradigm Two is over the 2.5 times the size of Blackrock’s new China fund which, itself, has recently raised $1billion. 

With more than $17billion being invested by VC funds in 2021 to date, some are beginning to question as to whether we are to see a correction in this asset class given some of the huge gains made over the last few years. An alternative view is, considering the huge amount of capital that central bankers are pumping into the world economy, interest rates have been driven down causing bond and equity markets to boom. So, investors are now searching for new and potentially fast-growing investment opportunities and firms that will benefit from the ever-digitising economy in which we now live.