Aaron Ahmadi

A recent trend in crypto hiring has confirmed an exodus of top talent from TradFi into the digital assets space that will surely spur mass adoption.



Meltem Demirors, chief strategy officer at digital asset investment firm Coinshares, <a href="https://twitter.com/Melt_Dem/status/1391829838516957189?s=20&amp;t=C1OUUm9AJQD9kWYgMUt16Q" target="_blank" rel="noreferrer noopener">spoke</a> early last year of the likelihood of talent leaving TradFi: “Crypto is going to drain banks of their top talent.”



Demirors appears to have been correct. A <a href="https://www.heidrick.com/en/insights/crypto-digital-assets/from-financial-services-to-blockchain-and-crypto-how-executives-are-making-the-switch" target="_blank" rel="noreferrer noopener">survey</a> carried out by executive search firm Heidrick &amp; Struggles found that almost half of respondents had entered the crypto sector from investment banking.



Crypto companies have more money to spend with <a href="https://fortune.com/2021/11/18/vc-crypto-funds-are-getting-bigger-so-are-the-opportunities/" target="_blank" rel="noreferrer noopener">venture capital funding</a> pouring into the sector. The digital assets arena is also expanding and has much greater depth when it comes to opportunities than heretofore through the development of Web3, decentralized finance, non-fungible tokens (NFTs) and blockchain-based gaming. Meanwhile, compensation at TradFi institutions is up considerably as they are now scrambling to compete for talent.



Coinbase alone <a href="https://coinmarketcap.com/alexandria/article/coinbase-plans-to-hire-2-000-more-employees-this-year?utm_source=ActiveCampaign&amp;utm_medium=email&amp;utm_content=Drake+has+just+won+%241+5+million+in+Bitcoin++here+s+how&amp;utm_campaign=Feb+15+Newsletter_FF&amp;vgo_ee=rghD" target="_blank" rel="noreferrer noopener">plans</a> on hiring 2,000 people in 2022. Data from <a href="https://www.linkedin.com/pulse/all-aboard-bitcoins-rise-inspires-even-big-banks-staff-george-anders/" target="_blank" rel="noreferrer noopener">LinkedIn</a> demonstrated a 615% increase in job postings containing terms such as ‘blockchain’ or ‘crypto’ last August compared to the previous year.



Amid the backdrop of the great resignation, people have changed how they think about life and work, making competition between the TradFi (traditional finance) and digital asset sectors even more acute. It also means that compensation is not the sole factor.



<a href="https://fortune.com/2022/03/07/jobs-in-crypto-hiring-wall-street-exodus/" target="_blank" rel="noreferrer noopener">According</a> to David Duong — who recently left HSBC to head up institutional research at Coinbase — “It’s actually a career risk if I don’t move into this space.” He discounts compensation as the primary motivation and cites an emphasis on the relevance of what he actually works on as the most important factor.



As money and financial systems continue to evolve, we are witnessing a shift from TradFi to the digital assets space. Talented professionals in financial services want to work on relevant and cutting edge projects. As Michael Bucella of crypto investment firm BlockTower Capital <a href="https://www.wsj.com/articles/on-wall-street-bonuses-are-up-but-the-mood-is-not-11642696264" target="_blank" rel="noreferrer noopener">put it recently</a>, crypto “offers [a] level of excitement that the banks can’t.” Bucella exited Goldman Sachs for BlockTower in 2017.



Crypto market maker GSR is a good example of the Cambrian explosion that’s happening in crypto and manifesting itself in the wealth of opportunities that the company is now offering. GSR is <a href="https://jobs.lever.co/gsr" target="_blank" rel="noreferrer noopener">hiring for 100 open roles</a> in London, New York, Singapore and Zug. Earlier this year John MacDonald, former managing director and chief technology officer at Citadel Securities in Europe, joined GSR as its CTO to drive the firm’s technology strategy.&nbsp;



The talent drain is not exclusive to banking. These roles span a myriad of functions including compliance, finance, legal, risk management, sales, software engineering, DevOps and enterprise technology and security.



GSR’s Michael Bressler late last year gave <a href="https://www.efinancialcareers.com/news/2021/12/gsr-crypto-jobs" target="_blank" rel="noreferrer noopener">insight</a> into even greater ambitions for the company, saying, “Our plan is to add 100 hires every six months for the next few years.”



The company’s intentions were certainly borne by its progress in 2021. While GSR started the year with a headcount of 60, the current team is now over 250.



Just like so many others that have made the transition, Bressler is a veteran of traditional finance, having worked for JPMorgan and Goldman Sachs previously. GSR’s global head of sales revealed what the company values most in new crypto hires: “A passion for crypto.”



Hiring is not confined to pure crypto startups either. Many of the companies in TradFi and fintech are also adding staff for newly created crypto units and projects. Having opened a crypto and blockchain business unit in 2021, PayPal has followed up by hiring 100 crypto experts. Payments company Stripe is diving back into crypto following a previous foray into the sector between 2014 and 2018.



Amid what can only be described as a crypto recruiting frenzy, and with crypto and traditional industry leaders announcing blockchain-based products, it’s only a matter of time before the adoption of cryptocurrency becomes a global standard across industries.



<hr class="wp-block-separator"/>



This content is sponsored by <a href="https://www.gsr.io" target="_blank" rel="noreferrer noopener">GSR</a>.

CoinShares

The Crypto Hiring Boom Key for Mass Adoption

Macauley Peterson

<div id="highlights-block_623b548e3c09e" class="highlights">
 <ul>
 <li>The “dao5” fund will target seed and pre-seed stage startups and sports a host of high-profile crypto names among its advisors</li>
 <li>Participants, including the founders of portfolio companies, will eventually receive a stake in the VC firm’s profits through DAO tokens</li>
 </ul>
 
</div>



These days, nine-figure venture capital funds are a dime a dozen, but the latest spin on the VC model from Tekin Salimi is that it should morph into a DAO.



Salimi, a former general partner at Polychain Capital, says his new fund, dubbed “<a href="https://dao5.com/" target="_blank" rel="noreferrer noopener">dao5</a>” has raised $125 million from crypto-native investors, earmarked for seed and pre-seed startup rounds. His plan is to help incentivize the founders of the fund’s eventual portfolio companies by giving them direct participation in the dao5 fund’s success through a DAO (decentralized autonomous organization) structure using tokens that represent the fund’s profits.



This structure is novel in that it actually dilutes Salimi and his co-investor’s stakes, but it encourages the founders of the companies they back to collaborate in ways that benefit the collective as a whole.



“We believe that cross-pollination is essential to fostering a collaborative founder community,” a document outlining <a href="https://dao5.com/principles.html" target="_blank" rel="noreferrer noopener">the fund’s principles</a> states.



For now, though, this plan is very much still on the drawing board, and will only be implemented in roughly three years, after 70% of the fund’s capital has been invested.



Notable among the avowed principles is a respect for pseudonymous participants. The fund “works closely with pseudonymous advisors, and invests in tokens launched by pseudonymous founders,” the principles document states.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“We believe that individual privacy is an inalienable right in the cryptoverse. We do not invest in surveillance technologies.”</blockquote>



Among the advisors are a who’s-who of crypto executives, investors and builders, including Do Kwon (Terraform Labs), Emin Gün Sirer (Ava Labs), Ben Fisch (Espresso Systems), Ivan Soto-Wright (Moonpay), Meltem Demirors (CoinShares), and the pseudonymous 0xb1 (founder of Fodl and an NFT curator) and Cuckqueen (Femboy Capital).



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Former Polychain Partner Charts Radical Course for New $125M Venture Fund

Sebastian Sinclair

<div id="highlights-block_623ab4c2bf008" class="highlights">
 <ul>
 <li>Prominent crypto institutions Wintermute, Amber Group and Folkvang have indicated an appetite to borrow up to $90 million on the platform</li>
 <li>Lenders only require access to a Web3 wallet, which provides both institutions and individuals &#8220;equal access&#8221; to yield opportunities, Clearpool said</li>
 </ul>
 
</div>



After months of development, decentralized capital markets protocol Clearpool is now live via its mainnet launch on the Ethereum network.



While the project has launched on Ethereum, there are plans to launch via blockchain scaling solution Polygon &#8220;soon,&#8221; Clearpool said in a release on Tuesday.



The Singapore-based project aims to provide a marketplace for institutional unsecured liquidity that leverages its native token CPOOL. Similar to <a href="https://cms.blockworks.co/maple-finance-originates-1b-of-loans-in-10-months/" target="_blank" rel="noreferrer noopener">Maple Finance</a> by design, Clearpool attempts to feed liquidity into capital markets for borrowers and lenders utilizing crypto while providing a return for investors hunting moderate yield.



Clearpool said it has over $100 million of capital committed for deployment via a range of liquidity partners including the likes of CoinShares, GBV Capital, Hex Trust and Sino Global Capital.



&#8220;We have been impressed by the team&#8217;s vision to increase lending capacity and capital efficiency for borrowers while balancing risk and exposure for lenders,&#8221; CoinShares&#8217; Chief Strategy Officer Meltem Demirors said.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">&#8220;We look forward to providing lending capacity to the market through Clearpool and working with the team to build and deploy new solutions to improve the efficiency of capital across the crypto capital markets ecosystem.&#8221;</blockquote>



Single borrower liquidity pools have been set up by crypto institutions&nbsp;Wintermute,&nbsp;Amber Group&nbsp;and&nbsp;Folkvang, all of which have displayed an early borrowing appetite. Amber and Wintermute have indicated their intentions to borrow between $25 and 50 million each, while Folkvang is seeking up to $40 million, per the release.



A further 30 borrowers from &#8220;leading crypto and traditional financial institutions&#8221; are also expected in the coming months, Clearpool said. Borrowers must complete a &#8220;comprehensive&#8221; know your customer (KYC) process and pass real-time risk scoring measures as well as be willing to stake solely in CPOOL.



Lenders meanwhile need access to a Web3 wallet connection to gain access, which provides both individual and institutional lenders &#8220;equal access&#8221; to the yield opportunities. Circle&#8217;s USDC on Ethereum is the first asset that can be lent to the protocol&#8217;s borrower pools with future plans to launch on multiple chains, the protocol said.



Founded in June of last year by Hex Trust CEO Alessio Quaglini and Robert Alcorn, a former trader at First Abu Dhabi Bank, Clearpool is backed by a number of prominent investors including Sequoia Capital India, Arrington Capital and Sino Global Capital, among others.



“The launch of Clearpool, in less than one year since the project was first conceived, is testament to the strength and capability of the team, community and partners that have come together to build its vision,&#8221; Alcorn said.



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Borrowing

Clearpool Mainnet Launch Promises Unsecured Liquidity for Investors

Casey Wagner

<div id="highlights-block_619d440c1055f" class="highlights">
 <ul>
 <li>Crypto native and traditional VC firms alike are investing in the space en masse</li>
 <li>Opinions are split on whether this is just what the industry needs or if the dollar flood is a little too frothy</li>
 </ul>
 
</div>



With more than $3 billion in venture capital funding this month alone, there is no shortage of cash in the crypto space.&nbsp;



In the first nine months of 2021, crypto startups raised more than $15 billion in venture funding, nearly five times the total amount for 2020, according to data from <a href="https://www.cbinsights.com/research/report/blockchain-trends-q3-2021/?utm_source=CB+Insights+Newsletter&amp;utm_medium=email&amp;utm_campaign=newsletter_general_thurs_2021_11_18&amp;utm_term=block-1&amp;utm_content=research-public" target="_blank" rel="noreferrer noopener">CB Insights</a>. 



“Early-stage rounds (seed/Series A) dominate the dealmaking, capturing almost 80% of deals in 2021 YTD,” Anand Sanwal, CEO and co-founder of CB Insights, wrote in a recent note.&nbsp;



So far in November 2021, <a href="https://cms.blockworks.co/paradigm-launches-2-5-billion-crypto-fund/" target="_blank" rel="noreferrer noopener">the largest crypto venture fund ever</a> — $2.5 billion — launched, <a href="https://cms.blockworks.co/blockchain-com-gives-bitcoin-mining-infrastructure-company-griid-525m-credit/" target="_blank" rel="noreferrer noopener">over $500 million</a> was invested in a mining infrastructure company and <a href="https://cms.blockworks.co/gemini-aims-to-raise-400m-to-bring-valuation-over-7b/" target="_blank" rel="noreferrer noopener">Gemini secured $400 million</a>, valuing the exchange at over $7 billion. 



“Investors like Coinbase Ventures are also bursting onto the scene — the VC arm was by far the most active blockchain crypto investor with 24 deals in the quarter,” Samwal wrote.&nbsp;



The money isn’t only coming from crypto-native firms, either. Traditional VC groups, from <a href="https://cms.blockworks.co/sam-bankman-frieds-ftx-raises-precisely-420-69m/" target="_blank" rel="noreferrer noopener">Sequoia Capital</a> to <a href="https://cms.blockworks.co/polychain-capital-paris-hilton-and-others-invest-20m-in-swiss-based-origyn-foundation/" target="_blank" rel="noreferrer noopener">Bill Ackman’s Table Management</a>, are beginning to enter the space, and experts are not surprised.  



“Venture capital is a great way for institutional investors to invest in crypto without in fact investing in crypto,” said David Tawil, president of ProChain Capital. “They get the exposure to the asset class in some way, but they don&#8217;t have to deal with the issues of the regulatory environment and compliance issues and risk related issues of Bitcoin or Ethereum and so on.”&nbsp;



<h3 class="wp-block-heading">Venture capital everywhere</h3>



It is no surprise that crypto projects are seeing an increase in funding given the broader success of venture capital investments in recent years, Tawil said, pointing to endowment funds.&nbsp;



“A limitless number of endowments clocked over 50% returns for the year, and the overwhelming majority of the outsized gains was attributable to venture capital-related investments,” Tawil said. “So although at some point, you would think that there would need to be a rotation, at least for now, it seems that there&#8217;s continued investment in venture capital in terms of leading the way for portfolio gains.”&nbsp;



There has also been a significant increase in the number of protocols and projects in the digital asset space seeking funding, Samwal and Tawil agreed. Tawil admitted that with so much money in the space and so many new projects, there are inevitably going to be companies or tokens that don’t succeed, but overall, he is confident that the VC trend will continue for some time.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“I believe that this technology is revolutionary, it has a crazy growth trajectory,” Tawil said. </blockquote>



“Crazy, like parabolic — in terms of what it is going to do for the world, how much revenue it&#8217;s going to generate. It&#8217;s going to take revenue away from other business lines — older line businesses, and so on — but there&#8217;s a ton of value to be generated.”



Others are less certain that the funding is being directed towards the best areas of the market.&nbsp;



“People are trying to put hundreds of millions of dollars into projects that have no product, no roadmap — just a general idea they wanna figure out with like, $1 to $2 [million] in funding,” Meltem Demirors, chief investment officer at CoinShares wrote in a <a href="https://twitter.com/Melt_Dem/status/1462956344403767298?s=20" target="_blank" rel="noreferrer noopener">Tweet</a> on Monday. 



David Pakman, a managing director at CoinFund thinks these seed and early-stage funding rounds are just what many companies in the digital asset space need. Over the last 18 months he has seen many projects develop with the support of small rounds, and now they are ready for larger investments.&nbsp;



Companies that were once largely overlooked are now “getting real revenue, and they&#8217;re accelerating rapidly — basically, they hit product-market fit,” he told <a href="https://fortune.com/2021/11/18/vc-crypto-funds-are-getting-bigger-so-are-the-opportunities/" target="_blank" rel="noreferrer noopener">Fortune Magazine</a>. 



Tawil is confident that even a bear market, which some experts have been calling for in recent months, will not dissuade venture money from entering the space.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“The VC money and the VC investment is probably going to grow even while cryptocurrencies themselves may swoon or may just stagnate,” he said.</blockquote>



“That begs the question of how there could be such dislocation in terms of pricing trajectory? You would think that things would stagnate on the VC side if they would stagnate on the cryptocurrency side, but if they&#8217;re not, then clearly there are different dynamics driving each one of those markets.”



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<hr class="wp-block-separator"/>

Anand Sanwal

November’s Crypto VC Funding Already Tops $3 Billion

Morgan Chittum

<div id="highlights-block_616588979dbfa" class="highlights">
 <ul>
 <li>Billionaire Mark Cuban, Metapurse, Multicoin Capital, Crypto.com, Alameda and Dapper Labs are among a few big-name investors in the startup</li>
 <li>Khan sees the potential for iNFTs to eventually rake in cash for their holders with what the company calls the “train-to-earn” model in its metaversal hub</li>
 </ul>
 
</div>



Victor Frankenstein, Cleopatra and Nikola Tesla — three of many familiar faces that can be seen featured as intelligent non-fungible tokens (iNFTs) that <a href="https://alethea.ai" target="_blank" rel="noreferrer noopener">Alethea AI</a> users can interact with on its newly launched network, “the world’s most intelligent metaverse”, according to founder Arif Khan.&nbsp;



Mark Cuban-backed Alethea AI, a startup that first allowed users to embed artificial intelligence, animation and voice capabilities into NFTs, is expanding further into the crypto asset’s billowing market with its most recent product offering.



“Creators and NFT holders can embed AI into their NFTs, giving their NFTs an intelligent, interactive, human-like personality,” Khan told Blockworks of iNFTs. “We&#8217;re essentially able to make this JPEG image come alive, have a personality and intelligence.”&nbsp;



Launched on October 7, users now have the ability to chat with their iNFTs, send video messages of their iNFTs to other users and have their crypto assets compete against one another in games.&nbsp;



Khan, who coined the term, described iNFTs as the “perfect metaverse Legos” that can “build an intelligent database and an intelligent decentralized metaverse.”



Alethea AI&#8217;s metaverse hub, dubbed Noah’s Ark, allows iNFTs to compete against one another in adversarial or cooperative competitions. “All competitions will strengthen the intelligence embedded in each NFT and consequently the network through an innovative concept termed, Intelligence Mining. The more users train their iNFTs and battle, the smarter the network becomes, and the more rewards accrue to the users for providing this training data,” according to a release from the company.&nbsp;



Within Noah’s Ark, Khan sees the potential for iNFTs to eventually rake in cash for their holders with what the startup calls the “train-to-earn” model. Since the assets are AI-embedded, Khan said, “[iNFTs] will earn revenue for their owners and users as they offer unique services on Noah’s Ark.”&nbsp;



iNFTs have not been limited to historical figures and fictional characters. Certain blue-chip NFT projects such as the Bored Ape Yacht Club, CryptoPunks and Pudgy Penguins can be embedded with AI and used in the platform to interact and converse as well. (Alethea announced a collection of iNFTs dropping on October 14 via NFT marketplace OpenSea, the company <a href="https://twitter.com/real_alethea/status/1446130531217805319?s=20" target="_blank" rel="noreferrer noopener">tweeted.</a>)



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“The NFT provides the property rights layer and the AI component makes the NFT come alive,” Khan said. “It’s no longer a static image like a CryptoPunk. This can actually talk with you, interact with you and have a dialogue with you.”</blockquote>



Project investor Meltem Demirors posted a demo on Twitter:



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">1/ my lil&#39; pudgy penguin fren is chatting w a <a href="https://twitter.com/gmoneyNFT?ref_src=twsrc%5Etfw">@gmoneyNFT</a>&#39;s <a href="https://twitter.com/BoredApeYC?ref_src=twsrc%5Etfw">@BoredApeYC</a>. this NFT convo was recorded completely AI-to-AI. this is a thread on the future of NFTs. pay close attention to what <a href="https://twitter.com/real_alethea?ref_src=twsrc%5Etfw">@real_alethea</a> is doing right now … <a href="https://t.co/ZDQAjSOM1p">pic.twitter.com/ZDQAjSOM1p</a>&mdash; Meltem Demir◎rs (@Melt_Dem) <a href="https://twitter.com/Melt_Dem/status/1446240012450861058?ref_src=twsrc%5Etfw">October 7, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Khan said, after founding the company in 2019, when he first wrote about iNFTs, &#8220;people thought I was a little bit insane.” But to him, “AI-generated media and [the] blockchain [were] a match made in heaven.”



In June, the startup had its first stint of commercial success after <a href="https://twitter.com/Sothebys/status/1403008495260209160?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1403008495260209160%7Ctwgr%5E%7Ctwcon%5Es1_c10&amp;ref_url=https%3A%2F%2Fwww.bloomberg.com%2Fnews%2Farticles%2F2021-08-24%2Fmark-cuban-backed-firm-alethea-is-creating-intelligent-nfts" target="_blank" rel="noreferrer noopener">Sotheby’s auctioned </a>off Alethea’s (and the world’s first) iNFT for almost $500,000 and later announced a <a href="https://cms.blockworks.co/alethea-ai-fetch-ai-embed-ai-into-booming-nft-market/" target="_blank" rel="noreferrer noopener">$16 million</a> private token sale.&nbsp;



The company has attracted big-name investors such as billionaire entrepreneur Cuban, Metapurse, Multicoin Capital, Crypto.com, Alameda, Dapper Labs and others.



“The result is not only fun and entertaining, but the foundation for a level of interactivity that is going to advance quickly using Alethea’s technologies. Alethea is bringing Avatars to life and you can experience it for yourself,” Cuban said in a <a href="https://medium.com/@arikhan/announcing-our-successful-private-token-sale-f690343e6385" target="_blank" rel="noreferrer noopener">statement.</a>

Alethea AI

Can NFTs Be Intelligent?

Jacquelyn Melinek

<div id="highlights-block_610317ac5fb86" class="highlights">
 <ul>
 <li>Bitcoin IRA, a large digital asset IRA platform, said more than 75% of their clients are over the age of 45 and 31% of near-retirees between the ages of 55 to 64 are invested in cryptocurrencies. </li>
 <li>Kingdom Trust’s platform Choice, an individual retirement accounts provider, and bitcoin mining firm Compass Mining announced today that they&#8217;ve joined forces to offer IRAs in a tax advantageous account for miners that produce crypto.</li>
 </ul>
 
</div>



The global cryptocurrency market is growing at a fast pace and while people generally think crypto retail investors are a younger demographic, there’s a new group emerging as prominent players: people looking to save for retirement via IRAs and benefit from tax advantages. 



According to stats from Bitcoin IRA, a large digital asset IRA platform, more than 75% of their clients are over the age of 45 and 31% of near-retirees between the ages of 55 to 64 are invested in cryptocurrencies.



In order to take advantage of the opportunity, Kingdom Trust’s platform Choice, an individual retirement accounts provider, and bitcoin mining firm Compass Mining announced that they&#8217;ve joined forces to offer IRAs in a tax advantageous account for miners that produce crypto. 



In general, the US Internal Revenue Service views bitcoins as taxable property, so they’re taxable in the same fashion as stocks or bonds. But, it’s possible for those investing in bitcoin to avoid hefty capital gains taxes by including digital assets in certain retirement accounts.



This means Choice users can buy bitcoin mining machines through an IRA and any coins created would be able to have tax-free appreciation in their retirement account like other assets such as real estate.&nbsp;



“We want to make it simple, approachable, relatable and easy,” Whit Gibbs, founder and CEO of Compass Mining said during a Twitter Space “Bitcoin Circular Economy” event on Thursday.&nbsp;&nbsp;



“You get to make bitcoin for yourself and we’re in a golden era of bitcoin where it’s incredibly profitable as well. It’s awesome to be able to onboard people to mining and get the tax advantage they can stack until they’re ready,” Gibbs said.&nbsp;



The platform launched in 2020 and has more than 125,000 retirement accounts with 20,000 alternative assets and $18 billion assets under custody.&nbsp;



As the retirement space grows, more companies in the crypto space are working together and building awareness in a tax-advantaged way, Meltem Demirors, chief strategy officer at <a href="https://cms.blockworks.co/coinshares-to-launch-business-segment-following-record-q1/" target="_blank" rel="noreferrer noopener">CoinShares</a>, said during the Twitter Space event.&nbsp;



<h3 class="wp-block-heading">Crossing generations</h3>



Although Bitcoin IRA mainly has an older user base, its service is available to people 18 years old and older, as long as they have earned income to contribute to the IRA. 



While the younger generation is known for diving into crypto, the older generation is catching on as well, Chris Kline, chief operating officer and co-founder of Bitcoin IRA, said in an interview with Blockworks. The older demographic is investing in cryptocurrency through self-directed retirement accounts due to a desire to catch up on retirement funds, inflation fears and tax benefits, he said.&nbsp;



Bitcoin IRA started in 2016 and went through waves of interest as price volatility loomed, Kline said. But he believes in the value of bitcoin long term and sees a huge shift in clients now wanting exposure to the cryptocurrency world.



In 2017, Bitcoin IRA had 700 account holders and as to date it is up about 14,186% to over 100,000 users with about $1.5 billion in total transactions, Kline said.&nbsp;



“What’s driving the investments is that [users] are seeing accelerated growth in crypto at seriously large levels,” Kline said.&nbsp;



About 13% of Americans invested in cryptocurrency in the past 12 months, according to a recent <a href="https://www.norc.org/NewsEventsPublications/PressReleases/Pages/more-than-one-in-ten-americans-surveyed-invest-in-cryptocurrencies.aspx" target="_blank" rel="noreferrer noopener">survey</a> by NORC at the University of Chicago. While 62% of the respondents said they aren’t investing in cryptocurrency because they don’t understand it enough.&nbsp;



The cryptocurrency markets have a lot of movement and volatility, which is something older generations aren’t used to, Kline said. But in order to reassure customers, he said Bitcoin IRA is hyper-focused on expanding its functions and accessibility, while sharing content and education beyond their products to educate users on the crypto space, too.&nbsp;



Although Kline said he isn’t a financial advisor or tax expert, he said there are more benefits to an IRA because you won’t have to pay <a href="https://cms.blockworks.co/theres-no-merit-to-that-80-crypto-capital-gains-tax-rumor/" target="_blank" rel="noreferrer noopener">capital gains</a> taxes, even though funds are subject to normal tax rates when accessed.&nbsp;



“To help Americans retire we have to offer more options, what started as a manual concept of a bitcoin IRA has evolved into 24/7 self-trading and expanded further with the first earned program so users could make interest on their assets,” he said. So, people can use bitcoin and get paid in bitcoin as rewards.&nbsp;



“Bitcoin is here to stay, it’s a big thing and we’re seeing clients wanting exposure to it,” Kline said. “Our mission is to help Americans retire, they’re behind on retirement planning and using alternatives [like bitcoin] is where they’re going for that accelerated growth,” he said.

Bitcoin IRA

Bitcoin and IRAs: Friends with Tax Benefits

Ben Strack

<div id="highlights-block_60d4f4a16ff38" class="highlights">
 <ul>
 <li>Silicon Valley-based company’s first two funds had raised about $800 million combined</li>
 <li>Size of fund a ‘harbinger of much larger financing rounds to come,’ CoinShares chief strategy officer says</li>
 </ul>
 
</div>



Venture capital firm <a href="https://a16z.com/about/" target="_blank" rel="noreferrer noopener">Andreessen Horowitz</a> has announced a new $2.2 billion fund that will invest in crypto networks and the founders and teams currently building within the digital assets space.



The investment offering will be the third of its kind for the Silicon Valley-based firm, also known as a16z. The first fund, launched in 2018, raised $300 million while Andreessen’s second fund, created last year, raised $515 million.&nbsp;



The fund will allow the firm to discover the next generation of visionary crypto founders and will invest in early seed-stage projects to fully developed, later-stage networks, according to a Thursday blog post by Andreessen general partners <a href="https://a16z.com/author/chris-dixon/" target="_blank" rel="noreferrer noopener">Chris Dixon</a>, <a href="https://a16z.com/author/katie-haun/" target="_blank" rel="noreferrer noopener">Katie Haun</a>, and <a href="https://a16z.com/author/ali-yahya/" target="_blank" rel="noreferrer noopener">Ali Yahya</a>.



The firm <a href="https://cms.blockworks.co/andreessen-horowitz-plans-1b-crypto-venture-fund/" target="_blank" rel="noreferrer noopener">was looking to raise</a> between $800 million and $1 billion, Financial Times reported in April, but far exceeded that target. 



“The size of this fund speaks to the size of the opportunity before us,” Dixon, Haun and Yahya wrote. “Crypto is not only the future of finance but, as with the internet in the early days, is poised to transform all aspects of our lives.”



Meltem Demirors, chief strategy officer at CoinShares, said that the new fund, which she noted is now the investment firm’s largest single vertical fund, is important validation that allocators want exposure to the crypto space. It comes as there is more allocation to crypto as an asset class, as evidenced by rising AUM in CoinShares ETPs, which she said has grown by 10 times.



“As more capital enters the ecosystem at later stages, company valuations get driven up and result in more allocators looking to enter the space, effectively creating a flywheel effect for capital and valuations,” she told Blockworks.



<h3 class="wp-block-heading">A harbinger of things to come</h3>



With $7 billion in venture deals announced year to date &#8211; excluding Bullish, which Demirors noted was infused with $10 billion of existing capital rather than new commitments &#8211; there is now more capital than ever looking to be allocated to areas like crypto startup equity, protocol tokens and debt financing, she explained.



“A $2.2 billion pool of capital means they could write a $5 million check every single day for a year and still have money left over,” Demirors said. “The sheer size is an indication of the growth potential of the space, and a harbinger of much larger financing rounds to come.”



Andreessen Horowitz, along with Polychain Capital, recently <a href="https://cms.blockworks.co/solana-labs-ceo-shares-roadmap-following-314m-fundraise/" target="_blank" rel="noreferrer noopener">led a private token sale</a> that raised $314 million for cryptocurrency startup Solana Labs. Solana said that the funding would in part be used to accelerate the deployment of market-ready applications focused on <a href="https://solana.com/news/solana-labs-completes-a-314-15m-private-token-sale-led-by-andreessen-horowitz-and-polychain-capital/" target="_blank" rel="noreferrer noopener">onboarding the next billion users into crypto</a>.



The firm was one of the largest two investors of Coinbase, which <a href="https://cms.blockworks.co/coinbase-direct-listing-shares-are-limited-demand-is-high/" target="_blank" rel="noreferrer noopener">went public in April</a>, with a stake worth $11.2 billion when the crypto exchange’s shares began trading.



Andreessen also participated in the <a href="https://cms.blockworks.co/anchorage-raises-80-million-as-banks-seek-to-solidify-bitcoin-strategies/">$80 million fundraising round</a> in February of Anchorage, a crypto platform for institutions, as well as the seed and Series A rounds for decentralized derivatives exchange company dYdX in 2017 and 2018.



<h3 class="wp-block-heading">Adding talent&nbsp;</h3>



With the new fund launch, the VC firm also announced it has expanded its team in an effort to bolster its regulatory and operational capabilities. The firm now includes experts in marketing, public relations, policy, regulatory affairs, recruiting and general startup management.



“As with any new computing movement, crypto has endured a variety of challenges and misconceptions,” according to the blog post. “That’s why we are also bringing together heavy-hitters across several functions to help translate crypto to the mainstream.”



Among the additions is Tomicah Tillemann, who joins as Andreessen’s global head of policy. He worked as a senior advisor to now-President Joe Biden and as Hillary Clinton’s speechwriter. Tillemann was also formerly chairman of the Global Blockchain Business Council and has held advisory roles with the United Nations, World Bank, World Economic Forum, and a number of blockchain companies.



The firm also promoted Anthony Albanese, who joined the firm last year from the New York Stock Exchange, to chief operating officer.

Meltem Demirors

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