Binance Plans to Launch World’s Largest Crypto Investment Fund
Hong Kong, CHINA — The world’s biggest cryptocurrency exchange by volume, Binance has confirmed plans to create a massive US$1 billion cryptocurrency-based fund to invest in Initial Coin Offerings (ICO), tokens and other cryptocurrencies. The plan was confirmed on June 1 by a Binance executive on Chinese chat app WeChat. Using only Binance’s BNB tokens as an investment vehicle, the “Community Influence” fund will be administered through the exchange’s Binance Labs, a blockchain and cryptocurrency startup incubator and will be focused on startups as well as other funds.
Binance, which relocated to Malta in April this year, in search of a more cryptocurrency-friendly jurisdiction, has already supported four blockchain projects through Binance Labs, including a US$30 million funding round for privacy-focused MobileCoin. In an online conference quoted by media outlet PANews, head of Binance Labs Ella Zhang said,
“INVESTMENT IS ALL ONE LEVEL, AND IT IS HELD ON A LONG-TERM BASIS.”
“WE DO PROPER ASSET MANAGEMENT. WE LIKE TO LOCK IN LONG-TERM PROJECTS. INVESTORS AND ENTREPRENEURS ARE LOCKED TOGETHER. NOT BELIEVERS DO NOT ENTER.”
For fund of funds investments as a limited partner, Binance will be looking to back funds with at least US$100 million in assets under management and with a focus on cryptocurrencies and blockchain technology. Binance will also launch the Binance Ecosystem Fund which Zhang said will include 20 partners.
The move should bring some cheer to the depressed cryptocurrency markets, with many ICOs either having been delayed or postponed indefinitely given the slightly more challenging fund raising and market conditions. According to one CEO of a Hong Kong-based blockchain startup and who had been mulling over an Initial Coin Offering (ICO), speaking on condition of anonymity as their fundraising situation is not yet public,
“Last year was easy. Investors made so much through gains from cryptocurrencies, they just poured it back into ICOs and ICOs just boomed. This year not so. Even great projects are not doing as well or raising as much.”
With the prices of major cryptocurrencies such as Bitcoin and Ethereum well down from their 2017 highs, the market may have sobered up to the fact that fund raising via an ICO is not a walk in the park anymore, with only the very best projects getting funded. With more seasoned hands like Binance Labs in play as well, the level of sophistication and competition in the ICO space can be expected to rise and presumably the quality of ICOs as well, this can only be good news for retail investors.
Check out my instagram: https://bit.ly/2kHq43z
