blockworks.co
An anonymous CryptoPunk NFT owner with an influential Twitter following has launched a fund that invests in NFTs on behalf of institutional investors.
Punk 6529’s venture, confirmed by two sources with knowledge of the matter, represents one of the first such funds run by an unnamed portfolio manager — and is a validation of a metaverse world in which the reputations of pseudonymous whales are built upon their savvy in picking NFT projects and not their background.
Blockworks granted sources anonymity to discuss sensitive business dealings. Punk 6529 confirmed the fund launch but declined to comment further.
6529 NFT Fund — which drew the interest of institutional investors, including crypto fund of funds operators — started trading recently. The amount of capital raised by its manager isn’t known.
Punk 6529, the owner of slews of other rare, valuable NFTs, has more than 240,000 followers on Twitter, where they espouse on everything from the future of the metaverse to regulation from the Securities and Exchange Commission (SEC) to wealth inequality.
“The Metaverse will actually happen this decade,” Punk 6259 wrote. “If it is open, human innovation will flourish. If it is closed, we are digital serfs of sorts. We 100,000 or so people right now are the front-line in this battle and we have to do it ourselves.”
The account is also building a virtual museum, 6529 Museum, and operates a number of virtual galleries for viewing NFTs and digital photographs.
In addition, the investor has been involved in bids for high-profile NFT projects, including bidding on imprisoned Silk Road founder Ross Ulbricht’s collection, The Block reported. They’ve also owned one of the CryptoKiddies, which have sold for more than 100 ether each,
Due diligence questions
The fund raises due diligence questions for deep-pocketed limited-partners looking to invest, sources said. Institutions typically have detailed vetting processes before backing a manager, including scouring an individual’s background and checking references. One of the sources, who invests in crypto funds, said he did not know Punk 6529’s identity.
How long of a lockup on investor capital the fund will impose also isn’t clear. It could impose fairly modest, hedge-fund-like liquidity, or the vehicle could go the private equity route — favored by a number of real-world funds that invest in art — and hold investor cash for a much longer period.
“If you’re going to build it as more of a trading platform, you do it as a hedge fund,” one source said. “But if you think of it more like art, you need to stick it in a [private equity] fund.”
There are few investment professionals with the know-how, at the moment, to mint serious money from NFT markets — so investors hungry for exposure may well sidestep traditional procedures.
Apart from owning hundreds, if not thousands, of NFTs, Punk 6529 started investing in bitcoin in the summer of 2013, they wrote, and “played a small role in BTC’s development and acceptance.”
The anon has championed first-time and small-time NFT investors by urging them to not only pony up money they are willing to lose, but also champion the importance of custody over keeping assets on exchanges and non-fungible marketplaces.
2022 will be the year institutions pour into the space, according to Punk 6529, evidently a fitting enough time to launch a fund.
“2022 will be the year of the institutions in NFTs,” they wrote. “Plan accordingly