New Bitcoin Mining Fund May Boost Crypto Adoption

Specialist blockchain and artificial intelligence investment firm Frontier announced that they were partnering with infrastructure provider for Bitcoin mining Bitfury to launch a Bitcoin mining fund, designed to give investors “convenient access to Bitcoin mining.” The fund is set to bring Bitcoin closer to mainstream adoption through providing investors with a way to participate in mining “in a confident and responsible manner,” according to Bitfury’s executives.

The fund is in a European jurisdiction and is under the supervision of Liechtenstein’s financial regulator. Valery Vavilov, CEO of Bitfury, said in the press release, “With this innovative fund, Frontier is providing investors with a novel way of accessing Bitcoin mining opportunities, creating financial opportunities and furthering institutional adoption of Bitcoin.”

The fund invests in turnkey assets comprised of mining sites with some of the lowest electricity and operating costs globally that feature state-of-the-art Bitfury datacenters, according to the announcement. The sites are scouted and operated by Bitfury, it added.

A spokesperson from BitFury declined to comment on the size of the fund.

“With the Bitcoin price down significantly from its all-time high, yet institutional interest growing every day, now may be an opportune time to consider investing in Bitcoin mining,” said Imraan Moola, co-founder of Switzerland-based Frontier.

The timing also goes hand in hand with the profitability of Bitcoin mining. Cryptocurrency analyst Alex Krüger said on Twitter that the current breakeven cost for Bitcoin mining is somewhere between USD 3,550 and USD 4,350, while the price of the asset is c. USD 5,500 as of the time of writing, which brings profits at above USD 1,000 per coin mined.

Bitfury Group was recently valued at USD 1 billion after it raised USD 80 million in a “private placement” investment in November 2018.

The company also holds a minority stake in Frontier, as well as providing hardware and end-to-end services for the fund.

Institutionals are already looking into ways to enter the crypto space. One of the popular ways this year seems to be through endowments: a survey recently showed that out of 150 participants, 94% said that they have participated in crypto-related investment activities in the past year. Out of those, 54% invested directly, while the remainder had gone through a fund.

Even major Ivy League university Harvard has dipped into crypto, according to reports, having invested directly into decentralized computing network Blockstack’s token sale.


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