Key Takeaways
- • BlockTower Capital, co-founded by former Goldman Sachs investment manager Matthew Goetz, expanded headcount from approximately 8 employees at the start of 2018 to 13 employees and opened a second office in New York in September 2018, despite a 52% year-to-date decline in cryptocurrency hedge fund performance.
- • The firm is launching a new venture capital strategy led by recent hire Eric Friedman (from Expa), positioning BlockTower to invest in startup equity and digital tokens alongside its core hedge fund operations.
- • Recent senior hires include Corey Miller (from Scout Ventures), Siyu Dai (quantitative trader from BofA Merrill Lynch and Nomura), and Steve Lee (former Goldman Sachs trader based in Tokyo and Singapore), signaling institutional-grade talent recruitment during a market downturn.
- • Cryptocurrency hedge funds have contracted significantly in 2018, with 96 new funds launched year-to-date versus 156 in 2017, yet established players continue to expand, suggesting capital concentration and market consolidation among better-capitalized firms.
- • BlockTower's co-founder Ari Paul brings institutional credibility, having previously overseen risk management at the University of Chicago's endowment investment office.
Summary
BlockTower Capital, a cryptocurrency hedge fund co-founded one year ago by former Goldman Sachs investment manager Matthew Goetz, is expanding operations despite a severe contraction in the digital assets market. The Stamford, Connecticut-based firm increased staff to 13 employees from approximately 8 at the start of 2018 and opened a second office in New York last month, demonstrating confidence in the sector even as cryptocurrency hedge funds have declined 52% year-to-date according to the Eurekahedge Crypto-Currency Hedge Fund Index. Bitcoin itself has fallen 54% over the same period.
The expansion reflects a broader pattern among established cryptocurrency investment firms that are consolidating market position during the current downturn. While new fund formation has slowed significantly—96 new hedge and venture funds launched in 2018 compared with 156 in all of 2017—existing players with institutional backing and experienced management are selectively hiring and expanding their operational footprint. BlockTower's growth suggests the firm has secured sufficient capital and investor confidence to weather the market rout.
BlockTower is simultaneously diversifying its investment mandate by establishing a venture capital operation. Eric Friedman, recently hired from startup incubator Expa, will lead this new venture strategy, which will have authority to deploy capital in both startup equity and digital token investments. This dual-strategy approach positions BlockTower to capture opportunities across both cryptocurrency trading and venture-stage blockchain infrastructure.
The firm has recruited senior talent from institutional finance backgrounds, reinforcing its positioning as a sophisticated, professionally-managed alternative investment vehicle. Hires include Corey Miller from venture capital firm Scout Ventures, Siyu Dai (a quantitative trader and algorithm developer previously at Bank of America Merrill Lynch and Nomura), and Steve Lee, a former Goldman Sachs trader with experience in Tokyo and Singapore offices. BlockTower's other co-founder, Ari Paul, brings substantial institutional credibility from his prior role overseeing risk management at the University of Chicago's endowment investment office.
The expansion reflects a broader pattern among established cryptocurrency investment firms that are consolidating market position during the current downturn. While new fund formation has slowed significantly—96 new hedge and venture funds launched in 2018 compared with 156 in all of 2017—existing players with institutional backing and experienced management are selectively hiring and expanding their operational footprint. BlockTower's growth suggests the firm has secured sufficient capital and investor confidence to weather the market rout.
BlockTower is simultaneously diversifying its investment mandate by establishing a venture capital operation. Eric Friedman, recently hired from startup incubator Expa, will lead this new venture strategy, which will have authority to deploy capital in both startup equity and digital token investments. This dual-strategy approach positions BlockTower to capture opportunities across both cryptocurrency trading and venture-stage blockchain infrastructure.
The firm has recruited senior talent from institutional finance backgrounds, reinforcing its positioning as a sophisticated, professionally-managed alternative investment vehicle. Hires include Corey Miller from venture capital firm Scout Ventures, Siyu Dai (a quantitative trader and algorithm developer previously at Bank of America Merrill Lynch and Nomura), and Steve Lee, a former Goldman Sachs trader with experience in Tokyo and Singapore offices. BlockTower's other co-founder, Ari Paul, brings substantial institutional credibility from his prior role overseeing risk management at the University of Chicago's endowment investment office.
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