Stanley Druckenmiller and Dan Loeb’s Third Point back $70 million funding round for crypto asset manager Bitwise

Druckenmiller, Stan Druckenmiller
  • Stanley Druckenmiller and Dan Loeb’s Third Point participated in a $70 million Series B fundraising round for Bitwise Asset Management.
  • Bitwise manages the world’s largest crypto index fund along with a host of other crypto fund products.
  • The round was led by prominent tech investor Elad Gil and Electric Capital and values the company at over $500 million.
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Stanley Druckenmiller and Dan Loeb’s Third Point participated in a $70 million Series B fundraising round for Bitwise Asset Management, the company announced on Tuesday.

The round was led by prominent tech investor Elad Gil and crypto venture fund Electric Capital and values the company at over $500 million. Prominent investors including Druckenmiller, Third Point, Bridgewater CEO David McCormick, KKR founder Henry Kravis, and others joined the round.

Bitwise manages the world’s largest crypto index fund, the Bitwise 10 Crypto Index Fund, along with a host of other crypto fund products. As of the first quarter of 2021, Bitwise managed over $1.2 billion.

The San Francisco-based company plans to use the funding to strengthen its balance sheet and accelerate the national buildout of its organization, team and product suite. Bitwise CEO Hunter Horsley said the new capital will cement the company’s “position as the premier crypto partner for professional investors.”

“We’re thrilled to be backing Bitwise,” said Loeb, Third Point’s CEO and CIO. “Bitwise has assembled a best-in-class team, has built professional-grade products, and is doing all the right things to build an enduring institution in the crypto economy.”

The news of Loeb’s participation comes a week after The Information reported that his hedge fund is co-leading a new financing round in BlockFi, a wealth management and trading firm for cryptocurrency holders.

Third Point, which manages about $17 billion, disclosed in a regulatory filing in late March that five of its funds hold crypto assets under custody with Coinbase. The amount and duration of investment is currently unclear.

Meanwhile, Stanley Druckenmiller has disclosed that he owns “some” bitcoin, and has also said that owning bitcoin could be a good hedge against inflationary pressure.

Existing Bitwise backers including Highland Capital, Khosla Ventures, Blockchain Capital, Castle Island Ventures, Alison Davis, Adam Nash, and Naval Ravikant participated in Series B round as well.

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Legendary investor Stanley Druckenmiller said dogecoin is a ‘manifestation of the craziest monetary policy in history’ in a recent interview. Here are 8 of his best quotes.

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Stanley Druckenmiller, Founder, Duquesne Capital Management in New York, 2014.

  • Stanley Druckenmiller told The Hustle in a recent interview that dogecoin is the “craziest monetary policy in history.”
  • The billionaire investor also shared his thoughts on bitcoin, ether, and the biggest risk to the stock market right now.
  • He also predicted which FAAMG company will first hit a market capitalization of $5 trillion.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Among the many things billionaire investor Stanley Druckenmiller believes in, dogecoin isn’t one of them.

In a recent interview with The Hustle, the investor said he does not keep tabs with the developments surrounding the meme cryptocurrency, which started as a joke in 2013.

“I just try and pretend doge doesn’t exist,” he told The Hustle. “I think so little of it, it doesn’t even bother me when it goes up.”

Dogecoin has risen at a blistering pace so far this year, soaring more than 7,200%. The massive gains were due in large part to prominent figures like Elon Musk and Mark Cuban continuously backing the token.

Druckenmiller, the head of Duquesne Capital Management, also shared some of his thoughts on bitcoin, ether, and the recent tech sell-off.

Here are his 8 best quotes from the interview, lightly edited and condensed for clarity:

On dogecoin:

“[Dogecoin] is just like NFTs. It’s a manifestation of the craziest monetary policy in history. And I think since there’s no limit on supply, I don’t really see the utility of [dogecoin] right now. It’s just this wave of money in the Greater Fool Theory.”

On bitcoin:

“I took my costs and then some out of it and I still own some of it. My heart’s never been in it. I’m a 68-year old dinosaur, but once it started moving and these institutions started upping it, I could see the old elephant trying to get through the keyhole and they can’t fit through in time.”

On ether:

I’m a little more skeptical of whether it can hold its position. It reminds me a little of MySpace before Facebook. Or maybe a better analogy is Yahoo before Google came along. Google wasn’t that much faster than Yahoo, but it didn’t need to be. All it needed to be was a little bit faster and the rest is history.”

On the recent tech sell-off:

“Think of the tech stocks like a company selling railway ties and building the guts of the internet. When you’re building the railroad, your sales are going up +50, +60, or +70% a year. But once the railroad is built [you don’t need the railway ties anymore]. Your growth not only doesn’t go up 70%, it goes down because on a rate of change basis, you don’t need any more railroad ties.”

On the FAAMG company that would hit $5 trillion:

“If you put a gun to my head or we’re going to Vegas: Number 1 would be Amazon, number 2 would be Microsoft … I’ve never really believed Apple had the innovation to take you to the next level and it is mainly a hardware company … Google could have a big pop, ironically, if the government breaks them up because their core search business is literally the best business I’ve ever seen.”

On the market’s biggest risk:

Without a doubt: inflation strong enough that the Fed responds to it. No doubt about it. This bubble has gone long enough and it’s extended enough that the minute they start tightening, the equity market should go down a lot.”

On the effect of the recent Wall Street Bets craze:

“They’ll probably migrate away from some of the more radioactive names like GameStop. But I think it’ll actually end up being some core healthy information moving through the sharing network.”

On concentrating one’s bets:

When I’ve looked at all the investors (that) have very large reputations – Warren Buffett, Carl Icahn, George Soros – they all only have one thing in common. And it’s the exact opposite of what they teach in a business school. It is to make large concentrated bets where they have a lot of conviction.”

Read more: Glauber Contessoto became a ‘dogecoin millionaire’ this year. He explains why the recent drop does not shake his bullishness in the joke token – and shared his advice for new buyers.

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Billionaire investor Stanley Druckenmiller says he owns bitcoin as a ‘sort of a plaything’ – and millennials look at it the way he views gold

Druckenmiller, Stan Druckenmiller
  • Stanley Druckenmiller said he owns bitcoin as a “sort of a plaything” but he isn’t sure if he believes in it.
  • “It could be a new asset class. The answer is I don’t know,” he said in a Goldman Sachs webcast.
  • Druckenmiller said younger millennials look at bitcoin the way he used to look at gold.
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US billionaire Stanley Druckenmiller says he owns some bitcoin, and it may well be a new asset class.

“I do own some of it,” he said in a recent episode of Talks with Goldman Sachs. “It’s gone up a lot since I bought it. It’s just sort of a plaything. I don’t really believe in it. I don’t really not believe in it. It could be a new asset class. The answer is – I don’t know.”

Bitcoin rose 13% to a record high on Monday after Tesla disclosed that it spent $1.5 billion to buy the popular cryptocurrency. The token was last trading around $43,725.51, smashing its previous all-time high near $41,000 set in January.

Tesla’s purchase is expected to create a ripple effect across corporations around the globe and add momentum to its shares as more investors start to factor in its crypto exposure as part of its overall valuation, according to analysts at Wedbush.

Read More: RBC says to buy these 15 stocks as small companies keep dominating the market – and details why each is a top pick for 2021

Druckenmiller, chairman of the Duquesne Family Office, said he didn’t think bitcoin would be trading as high as it is if the central bank weren’t pumping record amounts of money into the economy to stop it collapsing. 

Although he was skeptical of it at first, he said bitcoin advocates have done an “unbelievable marketing job.”

“It’s been around 13 years,” he said. “And particularly, younger millennials look at it the way I’ve always looked at gold.”

Druckenmiller said he does doubt whether bitcoin can act as anything other than a store of value. He cited volatility, an immense amount of energy used in its generation, and other complex technical problems as shortcomings.

However, he has previously said that owning bitcoin is a good hedge against inflationary pressure.

Read More: Wall Street’s resident IPO expert shares the strategy behind her ETF that returned 107% last year – plus 3 risks to the current IPO boom and 5 offerings to watch this year

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