Coinbase, Major Investment Firm Team up to Launch $500 Million Crypto Fund

Francisco Memoria
  • Coinbase and Wilshire Phoenix have recently teamed up to launch a fund capped at $500 million.
  • The fund is set to use a "novel approach" to help clients gain exposure in the crypto ecosystem.

Coinbase Custody, a unit of San Francisco-based cryptocurrency exchange Coinbase, has recently teamed up with New York-based investment firm Wilshire Phoenix to launch a cryptocurrency fund capped at $500 million.

According to a recently published press release, Wilshire Phoenix expects the fund to be launched later this year, to provide its clients exposure to bitcoin through a “novel approach” that’s reportedly set to mitigate “some of the risks” associated with the flagship cryptocurrency’s volatility.

Per the release, the investment fund “may” make it easier for financial institutions and investors to gain exposure to the cryptocurrency ecosystem. It won’t, however, “simply hold bitcoin.”

Per the document, investors and financial institutions may find it hard to buy and hold cryptocurrencies as under America’s Generally Accepted Accounting Principles (GAAP), their pricing models imply specific challenges. The investment firm believes its patent-pending system will provide a solution.

To limit counterparty exposure and “unnecessary additional fees” normally associated with investment funds, the firm will also not use derivatives or “any form of leverage” to help clients gain exposure to bitcoin, the press release states.

Bill Hermann, the founder and CEO of Wilshire Phoenix, stated that Coinbase Custody provides the firm a best in class platform on which to securely store digital assets.” The document adds:

While the fund is not intended to replicate a direct investment in Bitcoin. It will seek to provide investors and financial institutions with the ability to gain exposure to Bitcoin while mitigating some of the risks involved from sudden price movements of Bitcoin.

Sam McIngvale, general manager of Coinbase Custody Trust, added the San Francisco-based company is not only offering Wilshire Phoenix clients’ secure storage for their cryptocurrencies, but also the “ability to perform GAAP-compliant audits whenever the need arises.”

Coinbase, as CryptoGlobe covered, expects to wrap up this year with profits of over $455 million, up from $380 million last year, when most cryptocurrencies surged to new all-time highs. Last year, at one point, it was adding 50,000 users a day, its CEO Brian Armstrong revealed.

Recently, the host of CNBC’s “Crypto Trader” show Ran NeuNer stated Coinbase set planning for an initial public offering (IPO). Asiff Hirji, the firm’s chief operating officer (COO), recently revealed it isn’t planning to raise funds via an IPO “any time soon.”

ConsenSys Confirms 'Vast Expansion' of Blockchain Industry

The developers at ConsenSys, a Brooklyn, New York-based organization focused on Ethereum-related development, have published a blog post in which they revealed that the nascent blockchain ecosystem “continues to see vast expansion all over the world.”

According to ConsenSys’ management, the evolving distributed ledger technology (DLT) industry needs business development and project managers, UI/UX designers, software architects, and adequate capital allocation.

Large blockchain-focused enterprises and major DLT-based infrastructural projects have now been launched as the crypto industry continues to grow, ConsenSys’ blog post noted. Crypto startups have also “grown into formidable businesses” with “growing hiring needs”, the ConsenSys team revealed.

“Need for Thousands of Non-Tech Roles”

In order to help blockchain job seekers get started, the ConsenSys team has compiled a handy “knowledge checklist”, links to useful DLT-related information, “learning hubs”, and other pertinent resources.

Per the developers at ConsenSys: 

It’s not all cryptography and distributed systems, there’s a need for thousands of non-technical roles ranging from publicists to content creators, community managers and admin positions.

However, the majority of blockchain-related jobs require skilled developers and the need for experienced software architects “continues to be the area of most demand”, ConsenSys’ report confirmed.

LinkedIn: “33x Increase” in Demand for DLT Software Architects

Notably, blockchain developers topped the global list for job roles with the highest overall growth. This, according to LinkedIn’s 2018 U.S. Emerging Jobs Report which revealed that the demand for DLT software architects “grew 33x over the previous year.”

As detailed in LinkedIn’s market research report, fintech firms and other organizations currently looking for blockchain developers “range from small remote teams to VC-funded startups to industry leaders and tech giants.”

Established multinational IT and professional services firms such as Ernst & Young, Deloitte, Oracle, IBM, and Microsoft are all expanding their respective DLT-focused development teams. Meanwhile, smaller startups including the developers of the Marconi protocol are looking to enhance blockchain network security, privacy, and connectivity.

Blockchain Devs Are Making up to $175,000 per Year

As noted in ConsenSys’ blog, “advertised blockchain developer salaries — using aggregated data from CNBC, Janco Associates, and Burning Glass — range from $125,000 — $175,000.”

Meanwhile, AngelList data shows that salaries for tech jobs in the DLT industry “outweigh equivalent roles in non-blockchain organizations, highlighting the high demand for practical blockchain knowledge already.” Moreover, non-technical roles in the blockchain sector “also outrank similar roles in non-blockchain companies,” market data shows.