Venture capital firm Tribe Capital, known for backing cryptocurrency companies such as Kraken and Bitfinex, has announced the launch of a new crypto fund with the aim of raising $100 million. According to sources, the San Francisco-based company, which manages $1.6 billion worth of assets, plans to invest $500,000-$3 million in early-stage projects within the realms of layer 1 and 2 ecosystems, decentralized finance (DeFi) projects, and infrastructure initiatives designed to bring real-world assets on chain.
The new fund, coined “Digital Future Fund I,” follows Tribe’s previous cryptocurrency fund that raised $75 million in October 2021. Tribe’s primary goal is to support the growth and development of protocols that offer security, scalability, liquidity, and cross-chain compatibility. By doing so, the firm aims to boost trust and facilitate the widespread adoption of the crypto ecosystem.
Despite a 90% plunge in venture capital investments into crypto companies in January 2022 compared to a year earlier, Tribe Capital remains undeterred. The decline in investments can be partially attributed to the turbulent events in the past few months, which saw the collapse of FTX, a crypto exchange that was previously part of Tribe’s portfolio. Instead of retreating, Tribe is said to have considered leading a $250 million fundraise to help the bankrupt exchange restart its operations.
However, skepticism arises when considering the recent market fluctuations and the uncertainties surrounding the future of cryptocurrencies. As such, Tribe’s decision to invest in such a fund could either be a bold assertion of their confidence in the technology and market, or a potentially risky move in an uncertain landscape.
On the one hand, Tribe’s focus on investing in early-stage companies that strive to improve security, scalability, liquidity, and cross-chain compatibility aligns with the industry’s broader goal of evolving the technological infrastructure and enabling better applications. With the support of a major venture capital firm like Tribe, these cutting-edge projects can drive the entire crypto ecosystem toward broader adoption.
On the other hand, as the market experienced a significant downturn, some observers might question if Tribe’s decision to raise funds is well-timed. The future success of the Digital Future Fund I relies heavily on various market factors, along with the industry’s ability to recover from recent setbacks such as the FTX collapse.
In conclusion, Tribe Capital’s announcement of the new crypto fund signifies its unwavering belief in the future of cryptocurrencies and blockchain technology. With a focus on nurturing the development of innovative projects, the company aims to push the entire ecosystem toward a more trusted and widely adopted future. Although the current market conditions pose potential risks, the venture capital firm remains resolute in its strategy, which may ultimately lead to groundbreaking advancements in the crypto world.