Michael Arrington, the founder of TechCrunch, announced that he is going to be starting a hedge fund worth $100 million that will have a denomination with XRP, which is Ripple’s native token.
The announcement, made during the Consensus: Invest conference in New York on November 28, revealed that the name of the new fund would be Arrington XRP Capital.
The key thing to note about this new fund is that all investors when buying shares of the fund will subsequently get distributions that are in XRP, which is Ripple Consensus Ledger’s native currency. It is also currently the fourth biggest cryptocurrency in the world by market cap and ranked fifth overall according to CoinGecko.
Arrington released a blog post on November 28, saying that just one year ago he was simply a crypto enthusiast. Now he has changed the trajectory of his career to focus on cryptocurrencies and the relevant technologies. He aims is to spend the rest of his career in this sector, which is quite a commitment if he sticks to it.
The reasons Arrington and the rest of the founders of the fund decided to no use fiat currency to denominate the fund and go for XRP instead was because it was a much easier way for both foreign investors and holders of cryptocurrency to get involved with the fund.
The reason why they went for XRP, in particular, was down to the fact that it is extremely fast and has a secure settlement structure. The likes of American Express have already adopted the same sort of infrastructure.
He was adamant that this was an integral part of the fund and was not merely some gimmick that they decided to use. All of their salaries and fees will be paid using XRP, so they are fully invested in this cryptocurrency.
To date, it has been suggested that the fund managed to raise about half of its $100 million goal. The majority of their investments will be in the space of cryptocurrencies, as well as initial coin offerings (ICOs), it seems but they have not ruled out taking out small stakes of equity in some blockchain startups.
After the news was released, XRP saw a price rise, bypassing the $0.30 mark, which is the first time it has managed to do so since June 2017. It is currently trading at $0.233 which means that the current market cap of XRP now sits at $9.01 billion.
The investor’s move into Ripple is just the latest disruption to what was a previously settled world of finance. What is notable, is that someone of Arrington’s background has decided to push his chips all-in when it comes to cryptocurrencies, showing just how much confidence he has in the sector. No stranger to funds, he is also the founder of CrunchFund which has seen a total of 55 exits so far.