Osprey Funds plans a new entity for investing big in NFTs

Osprey Funds — a crypto investment firm that offers institutions exposure to several crypto assets —announced Thursday it is breaking into the market for non-fungible tokens (NFTs). Osprey will launch a new fund that might set the foundation for the firm investing hundreds of millions in the nascent market. 

According to a press release, the firm is launching a new entity dubbed Osprey Alpha, LLC, which will offer institutional investors access to funds that actively invest in NFTs, covering a wide range of assets including collectibles, art, and gaming assets. The firm has hired Justin Paterno to lead the new effort as managing director and portfolio manager. 

“Over time we could have hundreds of millions of dollars across these funds,” Osprey Funds CEO Greg King said in an interview with The Block.

King said that NFTs represent a new type of asset class for investors that is uncorrelated to both crypto markets and more traditional equity markets. “This is what we are really excited about,” he said. 

The market for NFTs took off earlier this year, and the most popular NFT marketplace, OpenSea, has already reached unicorn status.

According to data from The Block, the average price of an NFT sale within the arts and collectible category has soared to more than $100,000. Still, the market has been dominated mostly by retail players given the lack of funds and institutional custody products for large investors.

“We’re in business to provide investors with exposure to the most exciting segments of the digital asset ecosystem,” King said in a press release. “With Osprey Alpha, we will focus on the development and rollout of several unique, actively-managed strategies for sophisticated investors beginning with our NFT product.”

Still, by some measures interest has waned. Monthly volumes on OpenSea have declined from a peak in August above $3 billion to just below $1 billion in November.