Why Is Mike Arrington Using Ripple to Fund His New $100 Million Crypto Hedge Fund?
TechCrunch founder Michael Arrington has announced he is developing a $100 million fund to invest in cryptocurrency assets.
The capital will be used to buy and hold currencies along with partaking in token sales and a small amount of equity and debt.
The 47-year-old American entrepreneur is forming a new entity known as Arrington XRP Capital.
In a unique move, Arrington stipulates that all limited partners must make their investment using Ripple (XRP), the cryptocurrency that functions on Ripplenet. Arrington XRP Capital then uses XRP to pay all distributions and fees.
This signals Arrington’s next career move after founding TechCrunch, a leading Internet media outlet, in 2005. The new investment pot builds upon his similar experience with CrunchFund, an early stage venture capital firm headquartered in San Francisco.
“Today well over 10% of my net worth is in cryptocurrencies, and that will soon increase substantially as I’m also investing in Arrington XRP Capital. We’ll pay our own fees and salaries out in XRP as well. We want to ‘eat our own dog food’ and be active users of cryptocurrencies in as many parts of our fund operations as possible, not just investors. This will make us better investors.”
Arrington and his partners, Heather Harde and Geoffrey Arone, become the most recent big names to publicly back cryptocurrencies.
During Arrington’s announcement, there was nothing short of bullish enthusiasm for the future of this heated market. He went on to denounce the fears of a cryptocurrency bubble, stating in effect that the crypto revolution is still in its infancy.
“Some people think this is crazy and that we’re on the edge of a bubble-bursting meltdown in cryptocurrencies values. Others, however, argue that we’re just getting started in crypto. I’m one of those people. A year ago I was just a crypto enthusiast. Now I’ve altered my career path to focus entirely on cryptocurrencies and related technologies.”
Action speaks louder than words, and Arrington is looking to work with wealthy investors holding crypto assets rather than new money to the market. The clear message he is hoping to signal to investors is that this is not just a short-term, money-making mission, it’s more a long-term investment in the potential of blockchain technology.
Another aim of Arrington XRP is to make cryptocurrency hedge fund investments quicker and more fluid, easing some current frustration points.
Using Ripple injects clear advantages, reducing clunkiness of fiat payments thanks to the lightning-fast transaction times. Cryptocurrency market volatility is still an issue for anyone using payment features rather than a store of value. It’s a problem hindering the industry in the current form and a hurdle for Arrington XRP Capital too.
The move promotes a diversification in the market, which is currently reliant on Bitcoin and Ethereum.
Ripple – why is it useful?
Ripple is being developed as a solution for global payments. It currently enjoys a market cap of around $10 billion but only retains a value around $0.25. Many see it as a lucrative investment with plenty of scope for upward price movement as more payment processors adopt the technology.
Compared to many altcoins in recent time the price has been a little more stable, but not enough for payment solutions. It has still seen over a 38x rise over the past year, and Arrington’s news could change this further.
A real perk of the network is the cheap fees to accompany the speed. Transactions can be made for around $0.0003, a price most don’t even notice exists.
“Paying a big fee to order new furniture or even buy a cup of coffee may be further reason for consumers to pass on bitcoin.”
— Brad Garlinghouse (@bgarlinghouse) December 1, 2017
Ripple is backed by many other real-world finance and banking organizations that see the potential benefits. Santander even allows users to send money abroad on their smartphone app via Ripplenet. Arrington XRP is wise to avail itself of Ripple’s potential.
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