Jump Capital Dives into DeFi and Crypto
Jump Capital, a major hedge fund, and apparently a once “secret” Wall Street high-speed trading firm has now gone public with their crypto operation. It even shocked crypto reporters on the inside before the news dropped. The News Director of The Block summed it up like this:
Firm going all in on crypto tomorrow – never would have believed it when I first starting covering this space four years ago
— Frank Chaparro (@fintechfrank) September 14, 2021
Jump Capital went all in indeed, launching its own division called Jump Crypto, and will put its billions of dollars to use in the space. Jump Crypto is a behind-the-scenes type of player, they serve as the “backbone” for the Robinhood Crypto, providing liquidity for their crypto trading platform. They have been a major player in the crypto game for a long time, also “active in the Solana ecosystem” and even as a liquidity provider for FTX’s Solana-based Serum exchange.
It is very interesting that a private venture capital firm would have an active role in providing liquidity for a decentralized exchange, but such is the reality of crypto in 2021. The president of Jump, Kanav Kariya, said of the announcement, “we’ve been in crypto for six years now in various capacities, that spans a lot more than trading. Helping build out a lot of protocols, being involved in protocol governance, and extending into areas we have expertise in”.
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Jump is planning on expanding into more crypto VC activity, DeFi, and on-chain governance. Being involved in on-chain governance will give firms like Jump a certain valuable insight as well as the ability to try and steer a blockchain through voting power, in a PoS system.
To get Jump off the blocks, they have announced a $350 million dollar fund, that will have a “significant focus on crypto and will invest in dozens of companies”. The firm is already invested in Bitgo and Curv, two big crypto players. Jump’s recent endeavor means that 40% of its latest fund is dedicated to crypto.
The firm has also amassed BitPanda, an Australian exchange worth over $4 billion, as well as CoinDCX, an Indian exchange valued at $1 billion. Jump has made over 30 investments in the crypto space this year alone. The firm feels they will have a competitive advantage in the space due to their advanced knowledge of the finance industry and players within.
They mentioned that they “look at the startups as financial companies, not just crypto entities”. This knowledge “helps them cut through the market hype to find companies with real market potential and also allows Jump to offer stronger value-add to its portfolio’.
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We have mentioned that Hedge Funds will be scrambling to get their hands all over Bitcoin and crypto, and this appears to be happening rapidly. One thing to keep an eye out on is firms getting involved in governance, in order to try and influence chains and their development. By doing this, they will have to buy in and purchase tokens–this is basically what Proof-of-Stake means in the literal sense, and Jump appears to understand that.
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Text source: CryptosRus
