Tuesday, February 27, 2024
HomebitcoinBitcoin investment fund gains Wall Street backing

Bitcoin investment fund gains Wall Street backing

An investment vehicle for the virtual currency bitcoin has gained backing from some prominent investment firms, according to its parent company Pantera Capital Management.

Pantera Bitcoin Partners is an investment fund focused exclusively on bitcoin, other digital currencies, and companies which focus on them. Pantera announced Tuesday that Fortress Investment Group, a global investment firm based in lower Manhattan, will acquire a stake in its fund as well as California-based venture capitalists Benchmark and Ribbit Capital.

"These shareholders and their principals will generally make their purchases of bitcoin and other digital currencies via investments in Pantera," Pantera said.

(Read more: Why Warren Buffett is wrong on bitcoin)

The Bitcoin Center of New York City operates as a physical place for people to come and trade digital currencies.Getty Images

For Wall Street's Fortress, an investment in this new technology might not come as a surprise with Michael Novogratz, a principal at the company, being a high profile advocate of the cryptocurrency. In October, he recommended buying bitcoins when speaking at a panel discussion in New York. He said that bitcoins would be worth a lot in a few years, adding that they could be used as a cheaper way of transferring money in countries with weak banking systems.

Fortress has approximately $61.8 billion in assets under management. In its financial review for 2013 it revealed that it had purchased of $20,000 of the digital currency, but had also recorded $3.7 million in unrealized losses on bitcoin during the year, leaving it with a $16,298 holding.

Even before Tuesday's announcement speculation has been ongoing that Pantera Capital Management was on the verge of directing its efforts towards the digital currency. The firm was founded by Daniel Morehead in 2003 with a focus on global macro hedge fund investments but a filing on December 5 with the Securities and Exchange Commission revealed that it had already raised $147 million for the bitcoin vehicle.

(Read more: Roubini launches stinging attack on bitcoin)

In Tuesday's press release, Novogratz said that Fortress sees potential for the broader adoption of bitcoin and related technologies to reshape the global payment space.

- Advertisment -

Most Popular