First-ever fund-of-funds for cryptocurrencies

Protocol Ventures, the first-ever fund-of-funds for cryptocurrencies, has been launched by serial tech entrepreneur and investor, Rick Marini.

Bitcoin, and other cryptocurrencies, are appreciating at lightening speeds. The number of interested investors is increasing as well. In fact, large sums are being invested into Initial Coin Offerings (ICOs), the cryptocurrency version of crowdfunding. However, this industry is fairly new and ICO investors lack proper understanding of its risks and opportunities. This is where Marini says his fund-of-funds can help.

Marini was first introduced to cryptocurrencies by AngelList cofounder, Naval Ravikant, three years ago. Ravikant is also the cofounder of MetaStable Capital, a notable cryptocurrency hedge fund. Marini intends to invest from Protocol Ventures into MetaStable Capital and Neural Capital. He plans on investing in about a total of ten crypto hedge funds with diverse profiles,  strategies, and magnitudes.

There are over 100 crypto hedge funds for investors to choose from. "Family offices, institutions, and [high net worth] individuals want exposure to this space, but are unsure of how to pick the right fund managers to back," reported Neural Capital managing partner, Christopher Keshian.

MetaStable Capital's Josh Seims, however, is more cautious and says that it is too early to have an opinion on funds like Protocol Ventures. According to him, direct relations with principals are preferred but fund-of-funds do allow for better scaling.

Marini is initiating the fund with $1 million of his own money and hopes that it will eventually grow to $100 million, or more. He expects that his fund’s investors will be a mix of high net worth individuals, institutions, family offices, and venture capital funds.

ICOs have become a popular platform for IT startups to raise funding for their projects, but investors are being warned by experts to be careful as the practice is still unregulated. "Probably 97% of them [ICOs] are garbage and that's a problem the industry needs to clean up," said Marini. He believes that adding that regulations would help the industry.