Big names in traditional finance are scrambling to invest in cryptocurrency companies. Nevertheless, a vast majority of them are naturally risk adverse, which complicates the target selection process. That’s why Dan Tapiero created 10T Holding, an investment fund that invests in blue chips in the ecosystem, to provide exposure to those cautious players who don’t want to invest directly in Bitcoin (BTC) and other digital currencies.
10T: honoring conservative institutional investors
Founded in 2019, 10T is an investment fund that focuses on building a blue chip portfolio. The latter raised $750 million for its first fund. Dan Tapiero, who has 25 years of experience in long-term investing and commodity trading, is behind the fund. Tapiero previously served as a portfolio manager and macroeconomic analyst at some of the world’s most successful hedge funds, including Tiger Management.
10T’s investment thesis is to gain exposure to companies, with valuations in excess of $500 million, that can be designated as blue chips. This term refers to nationally recognized, well-established and financially sound companies. They are blue chips that are more resilient to market fluctuations, while still being able to generate growth.
Basically, this strategy does not allow for 100x betting, as funds that invest in tokens can do. Nevertheless, it is much more attractive for risk adverse players. Indeed, among the fund’s investors, we find for example the Michigan Municipal Employees Pension Fund.
10T also invests in late-stage companies to minimize risk. Conversely, Andreessen Horowitz(a16a) regularly participates in token sales.
650 million invested out of $750 million available
Since its launch, 10T has already deployed $650 million of the $750 million available. Deploying 80% of its funds, 10 T Holdings has invested in 11 companies, with valuations in excess of $500 million. Within 10T’s portfolio, we find Kraken, Ledger, eToro, Huobi and Figure, among others.
As 10T’s portfolio shows, the fund is truly investing in the most promising players. While this strategy is likely to limit risk for fund providers, it also generates significant returns:
“Within six weeks of our valuation, Kraken had increased its valuation by three to four times. eToro had increased its valuation by five to six times. I’ve never seen anything like that […] People tell me ‘you’re really doing crypto for Boomers. ‘ That’s kind of it.”
Dan Tapiero
10T’s latest investment is Deribit, the leading digital asset options firm. In a joint deal with Akuna Capital, 10T brought more than $100 million to the company.
Finally, according to Tapiero, there are reportedly 70 crypto companies with unicorn status, i.e. with a valuation of more than $1 billion. For comparison, there were only 20 crypto unicorns in 2020. Among the new unicorns, we can mention Ledger, OpenSea and FTX.
