SkyBridge Capital is also known for organizing the SkyBridge Alternatives Conference (SALT), an annual thought-leadership event in the U.S., designed as a capital introduction convention.
FTX Ventures is the investment arm of the FTX crypto exchange, managed by billionaire Sam Bankman-Fried. Since its launch in January 2022, FTX Ventures has made significant strides in the venture capital space, introducing a $2 billion fund to support digital asset investments from leading teams in the crypto and Web3 sectors. The firm has provided flexible funding and strategic support to assist companies in need of liquidity but lacking assets.
FTX Ventures’ Stake in SkyBridge Capital
FTX Ventures has continued its investment strategy by acquiring a 30% stake in SkyBridge Capital. The partnership, announced by both companies, aims to provide additional working capital to SkyBridge Capital to fuel growth initiatives and product launches. SkyBridge Capital pivoted towards crypto investments during the recent bull market and is planning a Web3-focused fund for late-stage crypto companies. CryptoChipy suggests that these plans may be announced at SkyBridge’s annual SALT conference.
SkyBridge Capital was affected by the crypto downtrend, with a sharp decline in July leading to the suspension of redemptions from a fund with exposure to FTX. However, the firm maintains that it remains profitable and debt-free. Scaramucci is still optimistic about Bitcoin’s long-term prospects and mentioned that part of the funds received will be used to purchase $40 million in cryptocurrencies as a long-term investment for the corporate balance sheet.
This investment is part of an ongoing collaboration between the two firms, which includes a multi-year partnership to sponsor SALT conferences in Asia, North America, and the Middle East. The partnership will expand into current and future product offerings, with SkyBridge continuing as a diversified asset manager while significantly increasing its blockchain investments.
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Reasons Behind FTX’s Acquisition of SkyBridge
Several months ago, SkyBridge Capital had suspended redemptions from its Legion Strategies fund-of-funds, which invested in Bitcoin, Ethereum, and other digital assets during the last bull cycle. The suspension was due to a liquidity mismatch caused by late-stage private investments in the fund. However, the fund does not use leverage, and there is no risk of asset liquidation.
SkyBridge Capital needed the investment due to a reduction in profitability, an increase in debt, and challenges in weathering current market conditions. FTX Ventures has been active in both investing in and acquiring crypto firms during the ongoing crypto downturn. The decision to invest in SkyBridge Capital was made to save the firm from bankruptcy and add value to its business. The two firms aim to cooperate and demonstrate how their partnership can benefit both parties and contribute to a healthy crypto industry.
SkyBridge has faced difficulties, with its crypto investments losing value and triggering an exodus of investors. The recent “crypto winter” wiped out approximately $2 trillion in market value over the past ten months. FTX Ventures has intervened to provide strategic assistance, helping struggling businesses and expanding into products such as stocks and options.
The Future of FTX Ventures and SkyBridge Capital
The investment is expected to strengthen both companies in the long term. Both FTX Ventures and SkyBridge Capital plan to expand their non-crypto-related investments. SkyBridge Capital is expected to emerge from its financial troubles and thrive in the cryptocurrency world. The partnership will enable both companies to expand their digital asset investment portfolios, offering mutual benefits.
Some believe that FTX Ventures’ investment in SkyBridge Capital is not entirely altruistic. FTX Ventures has stepped in to assist several stakeholders in the crypto industry, particularly digital currency platforms, as crypto prices have dropped sharply this year. FTX has stated that it still has billions available to support struggling firms that could further destabilize the digital asset industry. CryptoChipy continues to track the impact of FTX Ventures’ investment on the broader crypto sector.
