CMT Digital, a venture capital firm that has invested in over 150 crypto and blockchain companies since 2018, began raising for its fourth fund one month ago, the company has told Fortune. The firm is hoping to raise $150 million in capital for Web3 investments.
The fourth fund—if successful—will be the firm’s largest to date. The first three raised $25.5 million, $130 million, and $100 million, respectively. CMT Digital was one of the first firms to invest in crypto and was thus afforded access to some of the industry’s largest companies in their infancy, such as Circle, Coinbase, Consensys, and FalconX.
In terms of CMT Digital’s strategy for the fourth fund, investment partner Sam Hallene told Fortune the firm is thinking long term, investing “predominantly” in companies whose “vision” may not be realized for three to seven years.
“Right now, the next wave of innovation comes in the form of decentralized physical infrastructure,” Hallene added. This new realm of infrastructure relates to “application-specific hardware,” be it permanent file storage, or internet provision, he explained, citing Helium, a decentralized wireless network on the Solana blockchain, as an example of this.
He also indicated the firm’s burgeoning interest in stablecoins, both in terms of global remittances and yield-bearing tokens such as Ethena’s USDe. The latter currently boasts annual returns of 27.5% for holders, by tokenizing the cash-and-carry trade and monetizing from the desire to go long during a bull market.
Overseeing the raise is Gerald Brant, joining the firm as head of capital formation. Prior to joining CMT Digital, Brant was in the same role at both BlockTower Capital and Pantera Capital. In the latter position, he oversaw the firm’s asset growth from $400 million to $5.5 billion, and was pivotal in closing its largest institutional fund.
“I played for the Yankees when I was at Pantera, I’ve played for the Red Sox, so to speak, at BlockTower, and now I’m with the Chicago Cubs, where the games are more fun,” Brant told Fortune. Brant hopes to capitalize on the “enormous potential within the rapidly evolving crypto landscape” by expanding the firm’s global investor base, he said in a statement.
Crypto VC has come back to life in 2024, rising for a second straight quarter in Q1. Investments rose to $2.4 billion, up by 40.3% from the previous quarter, according to data firm PitchBook. Still, it pales in comparison with the type of investor interest in digital assets seen at the industry’s peak in early 2022, when funding reached $10 billion in the first quarter of that year.
Based in Chicago, CMT Digital is a subsidiary of CMT Group, a trading and investment firm operating since the 1990s, with a portfolio that reaches beyond digital assets, spanning public and private equity, debt, real estate, and technology.
