Crypto

Crypto Winter Hasn’t Stopped Billionaire Steven Cohen’s Company From Investing In DeFi

While the crypto market has lost $2 trillion in value since November 2021, the venture arm of the $22 billion hedge fund run by the man who inspired the TV show ‘Billions’, Steve Cohen, announced last week that it had invested in his fifth crypto. company, a decentralized finance firm that provides data and trade execution services for institutions.

Although the $20 million round was led by billionaire investor Mike Novogratz’s Galaxy Digital, the investment marks Cohen’s latest in a series of bear-market crypto deals and builds on his hedge fund’s earlier work in investment. private institutional and private capital.

As institutions reassess how they do or do not use decentralized finance, Cohen’s continued involvement in the struggling $41 billion industry is notable, as is his company’s decision to help build another bridge between the cryptocurrencies and the big trustworthy companies.

“We talked to our existing portfolio of fintech companies and heard, especially from financial institutions, one thing was very clear, crypto was a huge priority,” says the operating partner leading crypto efforts at Point72 Ventures, Adam Carson. “Either their customers were demanding crypto products or they saw it as a new business opportunity.”

Founded in 2016, New York-based Point72 Ventures is best known for investing in early-stage technology companies. The firm has more than 100 venture portfolio companies, investing in the likes of Peloton and Mirror, and has committed more than $1 billion of capital, according to a Point72 Ventures spokesperson.


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Although the venture firm did not begin its crypto work until about 15 months ago, Cohen’s conversion dates back much earlier. In 2018, his family business, Cohen Private Ventures, invested in San Francisco-based Autonomous Partners, a venture whose founding partner joined Andreessen Horowitz.

Cohen’s New York-based venture firm now employs 30 people, about a third of whom work on his broader fintech and cryptocurrency investments. The company’s crypto thesis aims to help financial institutions and businesses transition to Web3 by investing in companies that help merge the crypto and non-crypto worlds. In particular, his crypto investments are driven by the demand he sees from his non-crypto portfolio and from potential users.

While Point72 Ventures has not disclosed the terms of its investments thus far, it was the lead investor in the Series A round of its first investment in a cryptocurrency company, Messari, a New York-based research and data platform. . He also led the seed round for Zero Hash, a Chicago-based crypto infrastructure company that provides platform solutions for trading digital assets.

Other investments include New York-based Massive, which provides a new way for users to pay for digital apps and services; Bermuda-based 24 Exchange, a multi-asset class trading platform; and his latest investment, Skolem Technologies, a commercial DeFi company that helps institutions enter the decentralized finance space without having to hire new employees.

“Talking to hedge funds was what led to Messari and Skolem. Talking to fintechs led to our investment in Zero Hash. Then talking to the banks led us directly to our investment in 24 Exchange,” said Carson.

Coming at a time when the total value locked in defi markets has plummeted by 50% since March to $41 billion today, and when institutions are revaluing stablecoins, the investment is part of a trend broader showing that many investors in the space remain optimistic. .

Earlier in June, troubled cryptocurrency exchange Binance raised $500 million to invest in Web3 companies, and venture capital firm Felix Capital raised $600 million for the same purpose. Cryptocurrency and blockchain fundraising has more than doubled since 2020 with $5.2 billion raised in 2020 while $11.7 billion has been raised so far in 2022. Although experiencing a bear market, the value The 2022 crypto fundraising is just $1.7 billion short of the 2021 all-time high of $13.4 billion according to PitchBook, a capital market data firm.

Point72 Asset Management has been so successful that investor Steven Cohen, now valued at $16 billion, according to Forbes data, inspired Showtime’s hit television series “Billions” in 2016, starring Bobby Axelrod as Damien Lewis.

Although the notoriously quiet Cohen did not comment for this article, he told the Stray Reflections investment newsletter last year that he is “totally converted” to cryptocurrencies. In 2021, speaking at the Skybridge Alternatives Summit, Cohen said his conversion was largely due to what he described as his “cryptomaniac” son helping him change his mind. “He really convinced me that this was something he had to do,” Cohen said.

In addition to researching institutional markets, Point72 Ventures’ crypto team focuses on companies that enable others to offer crypto products. “They would say ‘we want to offer a buying, selling and trading experience, and we want to offer crypto rewards.’ They looked at what PayPal and Robinhood had done, which just introduced crypto products into their ecosystem,” says Carson.

Many of these companies faced similar problems: They lacked the necessary technologies to help them get off the ground. This led Point72 Ventures to its first run in the crypto space, institutional markets infrastructure, which essentially offers services to support financial institutions. “We designed the entire universe of that institutional markets infrastructure (in the crypto space) and that led to our first investments,” Carson said.

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