HONGKONG (Reuters) -Cryptocurrency exchange operator Huobi Group has launched an investment arm with $100 million to spend, setting aside some cash specifically for non-fungible tokens, the latest hot trend, the company said on Thursday.
The recent surge in prices for bitcoin and other cryptocurrencies has fuelled a global rush of fundraising by companies in the sector, with both traditional venture capital firms and cryptocurrency incumbents competing to snap up the best companies.
The new unit is the latest move by Huobi, parent company of one of the world’s largest exchanges for trading cryptocurrencies, to diversify its operations away from trading, after a separate unit, Huobi Tech, launched crypto-related funds for institutional investors last month.
The fund plans to acquire blockchain companies that can be integrated into Huobi’s existing businesses, making early stage venture capital investments. It includes $10 million specifically for investing in NFTs and marketplaces that trade them.
NFTs, virtual assets that exist on a blockchain ledger, have exploded in popularity this year. This week, Ebay said it would allow the sale of NFTs on its platform.
“What we see in the market today is only a fraction of what’s actually possible with NFTs,” said Huobi Group CFO Lily Zhang, who will head up the new Huobi Ventures unit.
The fundraising boom is already starting to extend to NFT companies. In a separate announcement on Thursday, Hong Kong based Animoca Brands, a gaming company which provides NFTs associated to items within its titles, said it had raised $88.89 million at a valuation of $1 billion.
(Reporting by Alun John; Editing by Lincoln Feast and Bernadette Baum)