By Jeff John Roberts
November 28, 2017

The prominent tech figure Michael Arrington announced a new hedge fund on Tuesday that will be denominated in the crypto-currency XRP, a rival to bitcoin that is closely tied to the software company Ripple.

The news, which Arrington announced at an investor conference in New York, is significant because investors will buy shares of the fund and receive distributions in XRP. While dozens of hedge funds have sprung up this year to invest in the white-hot digital currency market, this one, known as Arrington XRP Capital, is the first to be denominated in a crypto-currency rather than dollars or euros.

Arrington told Fortune that the fund would invest primarily in digital assets, including exotic ones, and in so-called “initial coin offerings,” which involve the sale of digital tokens that can in some cases provide access to an online service such as file sharing. He said the fund will invest to a lesser extent in the equity of crypto-related startups.

Arrington, who made his name in Silicon as the founder of the blog TechCrunch and as a venture capitalist, described the fund as a high-risk project, but says he is so excited about crypto-currency he plans to devote the rest of his career to it.

“Some people think this is crazy and that we’re on the edge of a bubble-bursting meltdown in cryptocurrencies values. After all, a year ago the total market value of all cryptocurrencies was just shy of $14 billion. Today it’s over $300 billion,” said Arrington in a blog post. “‘This is the time for everyone to get the hell out of cryptocurrencies!,’ many people argue, ‘Not jump in with both feet.’ Others, however, argue that we’re just getting started in crypto. I’m one of those people.”

The fund has so far raised 50% of its investment target. Arrington, who says over 10% of his own net worth is now in crypto-currency, did not name specific investors but suggested that many of them are those who have already made a lot of money of the incredible boom in bitcoin and other digital currencies, and want to branch out.

The launch of the fund comes at a time when digital currencies are becoming mainstream among investors and the financial industry. Nonetheless, Arrington acknowledges the crypto market still lacks the full range of financial instruments—specifically derivatives and banks willing to provide loans—that hedge funds typically rely upon as part of their money-making strategies. He believes, though, this is changing quickly.

Arrington says he chose to denominate the fund in XRP, which is the third or fourth most valuable crypto-currency, in part because he likes the financial infrastructure that Ripple has build up around it (you can read all about Ripple and XRP here). He added that it also makes sense for a fund dedicated to crypto investments to be denominated in a digital currency because it provides a much faster way to conduct transactions than conventional money.

Ripple, which provides blockchain software to major banks and companies like Amex, is not an investor in the fund or a partner. But the company will benefit from the fund’s decision to use XRP, in part because it controls large reserves of the currency (which may get a price boost from Arrington’s announcement) and because the move may burnish Ripple’s reputation as a money transfer platform.

Arrington is one of three partners in the new fund. The others are Heather Harde, who was the CEO of TechCrunch and a former M&A executive and investment banker, and technology executive Geoffrey Arone.

The Ledger is Fortune’s focus on the intersection of tech and finance. For more coverage, click here.

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