Despite the collapse of crypto prices in 2018, the entrance of a large state investment fund into a major crypto exchange appears to align with a growing tide of stalwart investors entering this sector.
Singapore sovereign wealth fund GIC was among investors who raised US$300 million for Coinbase, a digital currency exchange headquartered in San Francisco, California, people familiar with the matter told Bloomberg.
The Series E equity financing round in October 2018 also saw the participation of Tiger Global Management, Wellington Management, Andreessen Horowitz, Polychain Capital, and Y Combinator’s Continuity fund, but GIC's involvement was not previously reported.
Coinbase now has a valuation of $8 billion, making it one of the world's most valuable startups. Bloomberg cited documents that said Coinbase had forecast $1.3 billion in revenue for 2018, which is largely derived from commissions from trades made on the platform, as well as from gains and losses in its own crypto holdings.
Warming Up to Crypto
News of the sovereign wealth fund's investment in the platform comes as a surprise as the fund's CEO Lim Chow Kiat previously said that GIC would avoid crypto-related investments as it goes against GIC's investment mandate, which is «to preserve and enhance the international purchasing power of Singapore's financial reserves.»
In October 2018, Reuters reported that Vertex Ventures, a fund backed by Temasek Holdings, Singapore's other state investment fund, had invested an undisclosed amount into Binance to prepare for the Hong Kong-based cryptocurrency exchange's expansion into the city-state. In November, Bloomberg reported Temasek's investment in enterprise blockchain software firm and global banking consortium R3.
Until recently, Singapore authorities had repeatedly warned the public about cryptocurrency trading, citing the volatility associated with digital tokens and related business models. However, in May 2018, the government issued a crypto investing guide through its official website spelling out the pitfalls and risks associated, but also providing a series of steps for would-be crypto investors to follow, should they decide to enter this market.
GIC, which was founded to manage Singapore’s foreign reserves, has over $100 billion assets in more than 40 countries worldwide, according to its website.
