$14.5 m in coins to grow this Bitcoin Blockchain FundBy Vishal Dutta, ET Bureau
AHMEDABAD: Bitcoin Growth Fund (BGF), a blockchain-based startup fund, closed its first fund raising with $14.5 million (approx Rs 95 crore) as part of its initial coin offering (ICO) in the last one month. Founded in January 2017 in Dubai, the founding team includes Phil McCauley, Nagaraj Konda and Mattias Frost. BGF focuses on Asian markets, primarily India and China. BGF is a blockchain-based venture capital fund where
regular or small investors can invest by buying a token named 'MCAPS' via ICO.
An ICO works like an initial public offering. In an ICO, (retail) investors get tokens instead of shares in a company.
However, there are some key differences between IPO and ICO. While IPOs are regulated and issue shares in operational companies, ICOs are not regulated and issue digital coins for projects that have yet to be developed.
As per BGF, the minimum investment amount required is $5 and there are close to 6 lakh investors from India who have subscribed to MCAP via ICO. "
Sixty percent of the fund has been subscribed by retail investors from India," said Arvind Sehmay, director of BGF, further adding that most of the retail investors are from the tech and finance background who usually understand this kind of new asset class investment. He further said that the second-largest retail subscribers were from China (30%) and the rest were from South Korea and other countries.
Here the (retail) investors are not buying bitcoin or any cryptocurrencies, rather they are buying a token,
'Mcap', which is a cryptocurrency mining fund that would invest in various cryptocurrencies like Dash, Ethereum, Monero, Litecoin, Z-coin, and Bitcoin, among others.Mining is a farming process. The yield received during the process is distributed as either dividend or profit. During the mining process, miners try to get the cryptocurrencies as much as possible and as quickly as possible, as 90% of all cryptocurrencies' total output is predetermined.
In February this year, Bitcoin startups Zebpay, Unocoin, Coinsecure and SearchTrade had come together to form the Digital Asset and Blockchain Foundation of India (DABFI) to bring in transparency and growth in the virtual currency market as well as create awareness on the benefits and risks of cryptocurrencies, liaise with regulators and bring in clarity on taxation.
In the US, companies have raised $180 million via ICOs so far in 2017, compared to $101 million last year, according to Smith + Crown, a blockchain research, data and consulting group.
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