M31 Capital launches $100M Web3 fund with $50M in commitments

By: Michael Wilson

October 5, 2022 1:01 AM

The Bitcoin pioneer who seeded the investment fund claims that the current market cycle is the first time in a decade that prices and fundamentals have diverged so wildly.

M31 Capital, a firm that specializes in investing in cryptocurrencies, has launched a new fund specifically for Web3 companies, highlighting the industry's shift toward decentralized internet projects.

On Tuesday, Web3 revealed that the M31 Capital Web3 Opportunity Fund would invest up to $100 million in token projects and private equity opportunities. The initial focus of the fund is on initiatives aimed at creating decentralized internet infrastructure and applications. The new investment vehicle will likely take the form of a "liquid venture fund," a type of fund whose investors can withdraw their money after only 12 months.

For the record, M31 has stated that it has raised $50 million from investors and plans to raise another $50 million before capping the fund at $100 million.

There has been a proliferation of Web3 project-specific investment funds in 2022, despite the ongoing crypto bear market, indicating that investors see value despite the uncertainty. Cointelegraph Research reports that this year's VC funding has been largely focused on Web3. Web3 initiatives accounted for about 42% of all individual venture deals in the blockchain space in the second quarter.

For much of 2022, crypto markets showed a high degree of correlation with traditional equities, leading some to speculate that prices have significantly diverged from fundamentals. There is a high correlation between these two variables, suggesting that the cryptocurrency market may experience further short-term pain as governments attempt to rein in inflation.

Bitcoin (BTC) investor and M31 Capital founder Nathan Montone noted that the current crypto market cycle is the first time in ten years that "value has trended down whereas the fundamentals and revenue growth are hitting all-time highs nearly every day."