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Why venture capitalists are tapping into the cryptocurrency boom

Rebecca Zisser / Axios

Top-tier venture capital firms are quietly taking advantage of the recent explosion in new cryptocurrencies, with many backing so-called "crypto hedge funds" that trade and invest in cryptocurrencies, usually at their earliest stages. Others are experimenting alone.

Why it matters: More than $1.5 billion has been raised through initial coin offerings — or ICOs — so far this year. In many cases they can serve as an alternative funding mechanism to traditional venture capital, so backing crypto hedge funds can help VCs maintain a piece of the action.