ParaFi Capital Secures $120M Signaling Increased Confidence in Crypto

• ParaFi Capital raises $120M from investors highlighting the increased optimistic approach in the crypto sector.
• A portion of this capital will be used to acquire General Partner stakes in other crypto funds.

ParaFi Capital, a digital asset management firm based in New York, raised $120 million from investors, including Theta Capital Management and Accolade Partners. This fundraiser highlights the increasing growth and renewed optimism in the crypto investment sector.

ParaFi Capital, founded in 2018 by Ben Forman,  has been a significant player in the digital asset sector. The firm operates on both hedge fund and venture capital strategies, focusing on cryptocurrency and blockchain investments. 

With a 22-member team, ParaFi has consistently adapted to the evolving market, emphasizing long-term value creation through investments in early-stage blockchain projects and DeFi protocols.

In addition, a portion of this capital will be used to acquire general-partner (GP) stakes in other crypto funds, focusing on specific market segments. Over the next three to five years, ParaFi aims to build a portfolio of 30 to 50 such stakes. This approach is designed to diversify the firm’s exposure to the crypto market.

Institutional Investors Bet Big on Crypto

Ben Forman explained that while GP stakes are a growing asset class in traditional finance, they have not yet been established in the crypto sector. 

The involvement of prominent investors like Theta Capital Management, Accolade Partners, and Henry Kravis, co-founder of KKR & Co., highlights the growing confidence in the crypto market. 

In addition to ParaFi’s fundraising, other crypto firms and venture capitalists (VCs) are also raising capital. For example, Lemniscap, a crypto-focused VC firm, recently raised $70M to invest in startups on blockchain technology. These efforts indicate the increased funding activity in crypto as the market recovers from the 2022 market crash.

Moreover, ParaFi’s strategic shift and successful fundraising signal a new phase of growth and institutionalization in the cryptocurrency market. By building a diverse portfolio of crypto funds, ParaFi is positioning itself for continued success. It is contributing to the broader development of the crypto investment ecosystem.

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