- Punk 6529, as the anonymous NFT collector is known, has more than 240,000 Twitter followers
- The launch raises due diligence questions for investors accustomed to deeply parsing the backgrounds of fund managers
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 has drawn the interest of institutional investors, including crypto fund-of-funds operators, started trading recently. The manager has not revealed the amount of capital raised.
Punk 6529, the owner of a slew of other rare, valuable NFTs, has more than 240,000 followers on Twitter, where they expound on everything from the future of the metaverse to regulation by 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 run 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.
It is believed Punk 6529 owns potentially thousands of NFTs. The anon also claims to have started investing in bitcoin in summer 2013 and “played a small role in BTC’s development and acceptance.”
Punk 6529 has urged first-time and small-time NFT investors to pony up only money they are willing to lose, and also to maintain custody over their assets rather than keeping them on exchanges and non-fungible marketplaces.
But for now, though, their focus is on much bigger investors. “2022 will be the year of the institutions in NFTs,” they wrote. “Plan accordingly!”
Get the day’s top crypto news and insights delivered to your inbox every evening. Subscribe to Blockworks’ free newsletter now.
-
Michael BodleyManaging Editor
Michael Bodley is a managing editor at Blockworks, where he focuses on the intersection of Wall Street and digital assets. He previously worked for the institutional investor newsletter Hedge Fund Alert. Bodley’s work has been published in The Boston Globe, NBC News, The San Francisco Chronicle and The Washington Post.
