Major Financial Firms Compete for Control of SVB Capital, Crypto Funds, and Citi’s Private Blockchain

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Venture capital firms are increasingly preparing for portfolio rebalancing in 2024, with investors seeking to increase exposure to digital assets in the next bull market. Blockchain Capital, for example, recently closed two new funds totaling $580 million for investments in crypto gaming and decentralized finance projects. SkyBridge Capital, Vector Capital and Atlas Merchant Capital are reportedly among the final bidders for Silicon Valley Bank’s venture arm, SVB Capital. SVB Capital is a backer of venture capital firms in the crypto space, including Sequoia and Andreessen Horowitz.

Bitcoin-based investment products have gained traction among mainstream financial giants. Japan’s largest investment bank, Nomura, launched a new Bitcoin fund through its subsidiary, Laser Digital, for institutional investors. Web3 startup Bastion also raised $25 million in a seed round led by Andreessen Horowitz, Laser Digital Ventures, Robot Ventures, Aptos Ventures and Alchemy Ventures.

This week’s Crypto Biz looks into the bidding for SVB Capital, new funds from Blockchain Capital, the Hut 8-US Bitcoin merger and Citigroup’s private blockchain.

Anthony Scaramucci’s SkyBridge Capital and Atlas Merchant Capital are in the final bidding process for Silicon Valley Bank’s venture arm, SVB Capital. The company is expected to be sold off for between $250 million and $500 million, subject to review from the creditor’s committee. SVB Capital invests in various projects, including other major venture capital firms such as Sequoia and Andreessen Horowitz.

Canadian Bitcoin mining firm Hut 8 recently received approval from the Supreme Court of British Columbia for its merger with US Bitcoin. This will result in the formation of Hut 8 Corporation, or “New Hut,” which will become a publicly traded United States-based business. An announcement from Hut 8 highlighted that the merger will open up 825 megawatts of capacity across six different Bitcoin mining and data center facilities.

Blockchain Capital also closed two new funds totaling $580 million for investment in infrastructure, gaming, decentralized finance (DeFi), and consumer and social technologies. The funds will be split, with $380 million going to the early-stage fund and $200 million earmarked for the opportunity fund.

Citigroup’s Citi Token Services is allowing institutional clients to access cross-border payments, liquidity and automated trade finance solutions through its private blockchain. This service replaces bank guarantees and letters of credit, and two pilot programs have already been completed, with Danish shipping company Maersk and an unnamed canal authority.

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