After acquisition, BlockTower looks to capitalize on Wall Street's hunt for yield

Quick Take

  • BlockTower’s acquisition will yield a new market neutral fund
  • Launched today, the new fund has attracted endowments and funds of funds thirsty for yield.

BlockTower Capital, the cryptocurrency investment firm, is capitalizing on Wall Street's unquenchable thirst for yield. 

The firm, co-founded in 2017 by Matthew Goetz and Ari Paul, recently acquired Gamma Point in a $35 million deal, as previously reported by Bloomberg. Gamma Point specializes in so-called market neutral strategies and has now been fully integrated into BlockTower, according to a source familiar with the firm's operations.

BlockTower announced quietly that acquisition on June 28, noting in a press release that "there's a tremendous market neutral opportunity in cryptocurrency, and it's something we've consistently heard as important from investors and institutions looking for a strategy with this kind of profile that can remove the volatility so many focus on in this market."

A source said that the firm officially launched its new fund with Gamma Point on Thursday, which will now begin to deploy capital into market-neutral strategies, meaning they won't take directional long or short bets on a given token or coin. 

The plan is to continue to expand the fund's strategies — which can span DeFi yield farming to capitalizing on basis funding rates — and opportunistically take on new investors via individual accounts. Thus far, BlockTower has seen success in wooing progressive endowments to the new vehicle, according to a source. 

There are also fund of funds looking to incorporate crypto into their existing market-neutral strategies, the person added. 

Hunt for yield 

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