American investment firm Bain Capital announced its decision to open a crypto fund on March 8, 2022. The firm specializes in private equity, venture capital, credit, public equity, impact investing, life sciences, and real estate.
The Boston-based firm is launching a $560 million fund to focus on crypto-related investments. Founded in 1984, the company currently manages approximately $155 billion of investor capital. Bain Capital has been a crypto investor since the past seven years.
Back in May of last year, news broke that the company was looking for top-tier crypto traders. In September 2021, it was reported that public filings showed that Bain Capital had created a new crypto-focused fund. The company has earlier invested in the cryptocurrency space, including in companies like Digital Currency Group, Compound and Lolli, and others.
Bain Capital Crypto
The early-stage crypto-native fund has been launched with an intent to support advancements in technology and internet infrastructure. The newly-minted fund will be managed by Bain Capital Crypto (BCC), a part of Bain Capital Ventures.
In a written statement issued to the press, Bain Capital Crypto managing partner Stefan Cohen stated that, “We believe that we are at the precipice of a monumental technology shift towards open, community-driven, and decentralized services.”
The BCC will support emerging builders in the crypto-space through three key areas of expertise. The company aims to provide support through technical and economic research, which will help people make critical and informed decisions. Next, through governance design and participation, the company will actively participate in “code contribution, risk parameter adjustment, DAO organization, and management” to help these ecosystems survive and thrive in the modern-age. Thirdly, it will actively support both private and public markets while retaining flexibility to leverage protocols within its own capital.
The fund reportedly closed in November 2021 and has already invested in various crypto-related ventures to a tune of $100 million, which have not been disclosed.
Another managing partner, Alex Evans, informed Bloomberg, “We are fundamentally a long-term oriented, 10-year fund. We embrace the uncertainty of this market, we are long-term believers. When the certainty is there, it might be too late for this market.”
According to Bloomberg, the fund will focus on providing a leg up to crypto-start-ups and decentralized autonomous organizations (DAOs). Meanwhile, Cohen admitted that the fund is expected to deploy in the next two to three years and will invest in approximately 30 companies.
Bain Capital and Crypto’s Future
Bain Capital has invested in and supported crypto since its early days. It has invested heavily in the Digital Currency Group which builds and supports bitcoin and blockchain technologies. The DCG has a global presence and over 80 active investments. It also owns and operates various subsidiaries like Genesis Global Trading, Grayscale Investments, and CoinDesk.
The company also backs BlockFi, which allows users to buy, sell, and invest in cryptocurrency. BlockFi also offers other financial services to its customers.
It is widely believed that despite its volatile nature crypto will continue to grow bigger in 2022. Experts are of the opinion that US lawmakers will soon begin in proper regulation and establish guidelines to support investors and traders. This will also serve to deter cybercriminals who prey on the gullible. Early this year, cryptocurrency scammers made off with millions as they fooled investors to buy non-existent Amazon tokens.
Clear regulation will help investors track transactions and attract more participants. It will also have a positive impact on tax filings and might help regulate the volatility that comes with territory. Investors are of the opinion that regulation will help investors plan for the long term. Currently, most investment portfolios never invest over 5% in cryptocurrency. The unsaid rule is to never invest what you’re not okay with losing.
