Once the $1 billion cryptocurrency fund Polychain was in charge, the size of the assets under management is now shrinking.
According to a new filing from Polychain to the US Securities and Exchange Commission (SEC), Polychain managed assets of $591 million at the end of March this year, a figure that was $967.8 million in August last year and has now evaporated $376 million.
The Wall Street Journal quoted people familiar with the matter as saying that Polychain's assets under management have shrunk mainly because of the decline in the price of assets they hold, rather than the redemption of investors. According to a report by The Wall Street Journal last year, about one-third of Polychain's main funds were invested in Ethereum. However, Ethereum's token ETH has fallen by nearly 80% compared to its 2018 peak.
Polychain is one of the elite funds that serve the encryption industry startups. In 2016, former Coinbase employee Olaf Carlson-Wee founded the fund Polychain, the first fund to invest in tokens instead of the company. In December 2016, Polychain Capital received $10 million in financing from investors including venture capital firms Andreessen Horowitz (A16z), Boost VC and Union Square Ventures (USV).
With the rapid growth of the cryptocurrency market in 2017, Polychain has received several times the return from its early investment projects, and on the other hand has received the attention of well-known capital, including Sequoia Capital and Bain Capital Ventures. And the Founders Fund under Peter Thiel and the Silicon Valley heavyweight Andreessen Horowitz have all injected capital.
In 2017, Polychain achieved a return of 2303%, making it one of the best performing companies among multi-billion dollar investment companies.
But the good times are not long. The digital money market was cold in 2018. According to CoinMarketCap, from April to December 2018, the value of the management assets of San Francisco hedge funds fell by about 40%. During the same period, the total market value of the entire cryptocurrency fell. 50%.
On the other hand, Polychain is also experiencing the stage of “halo ablation”. But last year, Polychain lost 40% of its $800 million in revenue last year due to investment losses and the divestment of some early investors. At the same time, founder Olaf Carlson-Wee cashed in $60 million, which triggered Investors' concerns about the fund's revenue commitments; in addition, due to poor performance in 2018, Ryan Zurrer, the chief venture capital partner, was fired.
In the file submitted to the US SEC by Polychain, it acknowledged that there is a significant risk in investing in encrypted assets and wrote: “There is no way to ensure that digital assets can maintain their long-term value in terms of future purchasing power, or that mainstream retailers and commercial enterprises pay for digital assets. The acceptance will increase."
But even if asset management scales down sharply, Polychain's position and prospects in blockchain investment are not to be underestimated. According to its submission, the company manages five funds: Polychain Master Fund, Polychain Master Fund II, Polychain Ventures, Dfinity Ecosystem Fund and Polychain Opportunities Fund I.
In addition, the current POS public chain in the Staking equity pool has a total market value of about 6 billion US dollars, as the "POS mining continent of the POS mining", its early bet on the star chain of Nervos, Cosmos, Tezos, Dfinity and so on. It is not impossible to have a comeback.
Currently, Polychain's latest investments include: In April this year, together with the encrypted venture capital Andreessen Horowitz, invested in the blockchain payment startup Celo's stable currency plan; in March, together with the encrypted venture capital Digital Currency Group, invested in the physical delivery of the encrypted futures exchange Coinflex .
Source: Planet Daily