New York Digital Investment Group (NYDIG) today disclosed, in an SEC filing that it closed a $190 million bitcoin fund. The NYDIG Institutional Bitcoin Fund LP, reports that it has 24 unnamed investors and is exempt under Rule 506(b) of the Regulation D safe harbor protections established in 2013.
Notably, another NYDIG investment called the Bitcoin Strategy Fund was advised by Stone Ridge Asset Management LLC, a $15 billion advisor whose regulatory affairs boss Ben Lawsky, created the BitLicense granted to NYDIG in November 2018, less than a year after he was hired. Stone Ridge co-founder Robert Gutmann is listed as the CEO of NYDIG Execution LLC in a 2018 statement from the New York Department of financial services.
While details of the new fund are a mystery, it is notable for another reason. Last month, NYDIG announced it had closed another, similarly named fund for $140 million. If the fund, called the NYDIG Bitcoin Yield Enhancement Fund LP is in fact a different financial instrument, NYDIG has quietly become one of the largest institutional investors in bitcoin in the United States, with a total of $330 million in bitcoin between the two funds. A representative of NYDIG declined to comment.
The matter is further complicated by a name change to the NYDIG Institutional Bitcoin Fund LP, updated today, which was previously called the NYDIG Institutional Digital Asset Fund LP. While we’ve been unable to confirm the $190 million NYDIG Institutional Bitcoin Fund LP updated today and the $140 million NYDIG Bitcoin Yield Enhancement Fund LP closed last month are in fact different, other evidence supports they are.
Namely, the Institutional Bitcoin Fund made its first sale on October 26, 2018, according to today’s documents, and the Bitcoin Yield Enhancement Fund started selling just a week before it closed. A third fund for bitcoin futures, called the Bitcoin Strategy Fund, is currently listed on Stone Ridge’s site under the ticker symbol, BTCNX.
Either way, the presence of a new major player in the institutional investing in bitcoin space is notable. To date, institutional investing in cryptocurrency has been largely dominated by Barry Silbert’s Grayscale, which has $4.0 billion in assets under management, with another new player, 3iQ announcing a smaller, but still significant $48 million exchange-traded product listed on the Toronto Stock Exchange.
Editor’s note: This story has been updated to show that NYDIG was granted its BitLicense after hiring Lawsky,
I report on how blockchain and cryptocurrencies are being adopted by enterprises and the broader business community. My coverage includes the use of cryptocurrencies such
I report on how blockchain and cryptocurrencies are being adopted by enterprises and the broader business community. My coverage includes the use of cryptocurrencies such as Bitcoin, Ethereum and Ripple, and extends to non-cryptocurrency applications of blockchain in finance, supply chain management, digital identity and a number of other use cases. Previously, I was a staff reporter at blockchain news site, CoinDesk, where I covered the increasing willingness of enterprises to explore how blockchain could make their work more efficient and in some cases, unnecessary. I have been covering blockchain since 2011, been published in the New Yorker, and been nationally syndicated by American City Business Journals. My work has been published in Blockchain in Financial Markets and Beyond by Risk Books and I am regularly cited in industry research reports. Since 2009 I’ve run Literary Manhattan, a 501 (c) (3) non-profit organization dedicated to showing Manhattan’s rich literary heritage.