The cofounder of a streaming-music app has launched a crypto mutual fund - and he thinks he'll be managing $500 million by year end
- Jonathan Benassaya's IronChain Capital launched two mutual fund-like products for cryptocurrencies on Friday.
- Benassaya, who cofounded music-streaming app Deezer, said the funds will offer daily liquidity for investors.
- Benassaya said he thinks the funds can grow to $500 million by the end of the year.
Jonathan Benassaya, a serial entrepreneur who founded music-streaming app Deezer, is going all in on crypto. And he is betting his new venture, IronChain Capital, will play a key role in bridging the gap between the masses and the nascent market for digital currencies.
Benassaya, whose IronChain Capital launched Friday with two mutual fund-like products for cryptocurrencies, told Business Insider he thinks his funds will manage $500 million by year-end. One fund targets institutional investors, whereas the second targets accredited US investors.
IronChain joins a number of other fund providers on the market, including California-based Bitwise Asset Management, Heymeyer Trading, and Grayscale Investments, which oversees $2 billion.
The funds will track a market-cap weighted index of 10 cryptocurrencies, according to Benassaya.
The differentiator, according to Benassaya, is that the funds will offer daily liquidity at lower price point than competitors.
Investors will be able to close in and out of the product at 4 p.m. at the end of every day.
"We have build a network of liquidity providers across OTC desk and exchanges," Benassaya said. "This is the most liquid product on the market."
Grayscale, by way of comparison, requires its customers to hold on to its eight products for one year before they can get liquidity.
IronChain will charge a 1% management fee, 50% less than what Grayscale charges for its flagship product.
Benassaya told Business Insider that the next step for the company is to open up the institutional fund to non-accredited investors.
"When regulators give the green-light it can become an ETF," Benassaya said. "We can grow to half a billion by end of year."
That's an ambitious goal for the firm, which will manage something in the low tens of millions to start.
The firm also told Business Insider it completed a $2.5 million seed funding round led by Matrix Partners with Montage Ventures and Draft Ventures also participating.
Founders also include Steven Baum, who founded two multi-billion hedge funds, Michael Yeh, formerly of Goldman Sachs, and Anton Muehlemann, formerly of Wikifolio.