Komal Joshi · Oct 19, 2020 . 6min read
Custody to more than $1B, Stone Ridge has invested $115M in Bitcoin
NYDIG maintains custody to parent company Stone Ridge's 100,00 bitcoins which is worth at least $115 million presently.
By Victor Ugochukwu · Oct 14, 2020 . 6min read
Multi-billion dollar Stone Ridge Asset Management which is custody to more than $1 billion assets under management, has revealed that it invested a cumulative of $115 million in Bitcoin.
As revealed in a recent Forbes publication, Stone Ridge’s subsidiary – New York Digital Investment Group (NYDIG) raised $50 million through private investments in 2017. It went on to use that funds to build execution and custody tools from scratch. A business spinoff which can comfortably be described as the “goose that lays golden eggs” for Stone Ridge today.
The spinoff, NYDIG, went on to raise a further $50 million led by Fintech Collective last week. This thereby brings total investment in NYDIG to $100 million and now acting as custody to its parent company’s Bitcoin holdings. As per the announcement, NYDIG maintains custody to Stone Ridge’s 100,00 bitcoins which is worth at least $115 million presently.
The New York Digital Investment Group is both operationally and technically competent to maintain custody of clients funds today. For context, the state of New York granted NYDIG a Bit License to sanction its crypto to fiat on-ramp activities. Still from NYDIG is the NYDIG Trust. This is limited-purpose trust charter allowing it to buy and hold bitcoin and other cryptocurrencies for investors.
Stone Ridge’s NYDIG serves some big investors in bitcoin and crypto asset custody.
Quite impressively, NYDIG maintains custody of some reputable industry names. And surprisingly, the $115 million it manages for Stone Ridge isn’t even its biggest client. NYDIG manages one of Ripple’s Chairman Chris Larsen, XRP wallets. It also maintains custody of Institutional Bitcoin Fund LP’s $190 million as well as $140 million for Bitcoin Yield Enhancement Fund.
Stone Ridge cofounder Robert Gutmann also hints at another business opening. Due to OCC’s recent statement concerning banks maintaining custody for digital asset providers.
“We’re having lots of conversations with banks, about various kinds of partnerships all the way from basic sub-custody solutions. Up to end-consumer products that the banks are providing, where we’re the back end.”
To demonstrate its business readiness, NYDIG has hired industrial heavyweights. It hired former Goldman Sachs partners Ronnie Wexler and Tejas Shah last month. Brooks Gibbins, the managing partner of the lead investor, FinTech Collective, is joining the board as per the latest funding round.
The wave is already blowing for institutional investors to get into bitcoin, from Microstrategy’s recent pumping of $425 million into bitcoin to Square’s $50 million. It remains to see if many others will be following suit.
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