The bullish trend of mainstream financial executives switching decisively over to the cryptoverse continues. The latest to follow suit is Sequoia Capital partner Matt Huang, who will collaborate with Coinbase co-founder Fred Ehrsam to develop a crypto fund.
Wall Street Journal reports that Matt Huang will end his four-year career at the California-based venture capital firm Sequoia Capital. Huang, who joined Sequoia in 2014, will leave the firm in June, though Sequoia will make a substantial investment in the fund, according to the Journal.
Huang will be joined by Fred Ehrsam in the new crypto focused venture fund. At the start of last year, Eshram announced his departure from the day-to-day operations of one of the top American crypto exchanges, Coinbase, which he co-founded. He however remains on the powerhouse exchange’s board of directors. The two, who have extensive expertise in how cryptos operate, present a definite force to be reckoned with in the industry.
Wall Street quotes an anonymous source familiar with the matter who says that the split was amicable and and professional for Huang, as Sequoia will invest heavily in Huang’s fund. Sequoia acknowledged his exit will be finalized by the end of the month.
Alfred Lin, a partner at Sequoia, said in a statement about Huang’s imminent exit:
Matt will remain a good friend of Sequoia and we wish him great success,
Venture Capitalists ride every new wave of technology to determine what scope of investment into technology should be committed. However, when it comes to the crypto space, most VC firms were reluctant at the start, but now many are riding the blockchain wave- such as Sequoia Capital and Andreessen Horowitz. Sequoia recently had a legal disagreement with exchange giant Binance, for example, showing their increased interest in the ecosystem; interest that’s led to experience for Huang.
Huang expressed his new-found love for blockchain and cryptocurrencies to Business:
Once you spend enough time in the area, there’s enough real substance coming to the forefront and strong legitimate teams working on interesting problems that I think it is a really promising space for investing.
Crypto-Focused Funds on the Rise
In the last couple of years, crypto-focused funds have sprouted around the world. However, their profitability has come under intense scrutiny. For instance, Eurekahedge’s returns for the year are at -12.54 percent for the crypto funds segment. At the start of the year Lex Sokolin, Global Director of Fintech Strategy at Autonomous Research LLP, said as many as 10 percent of then-operating cryptocurrency funds could cease operations by the end of 2018.
Irrespective of the current rate of returns, individuals are still being buoyed by the 2017’s wild crypto economy bull run, leading to many crypto experts starting their own crypto focused funds. As far as Huang’s and Eshram’s effort goes, they have the intellectual resources and capital necessary to predispose them toward success.
Do you believe that crypto-focused funds will be successful in the ever-volatile crypto market? Share your views in the comments section.