BlockTower Capital, the crypto hedge fund, is diving into venture capital, according to people familiar with the matter.

It has hired Eric Friedman to head up those efforts.

BlockTower founder Ari Paul. BlockTower Capital

Crypto hedge fund BlockTower Capital is diving into venture capital investing with a new fund, according to people familiar with the matter. It will devote $20 to $25 million to the new fund, the people said, and will invest in startups in the crypto space.

The Connecticut-based firm, which launched in August, is among the best-known crypto hedge funds in a booming space that now includes over 200.

To head up its venture efforts, BlockTower has hired Eric Friedman, formerly of Expa, a California-based investment firm. Friedman joined the firm in April, according to his LinkedIn profile, as a partner.

"Early stage investing @ BlockTower Focused on working with great founders building incredible companies," his profile reads. "Helping people build the machine that builds the business - hiring, scaling,operationalizing and monetizing companies."

Friedman previously worked at Foursquare as global senior director of sales and revenue operations. He also spent some time at Union Square Ventures.

In April, Axios reported on the new fund and on Friedman's hire, but did not definitively report that he was joining to head the fund.

BlockTower has been hiring new staff since the beginning of the year, including Steve Lee, a former portfolio manager and trader at Goldman, as a director to improve BlockTower's strategic partnerships and business development in Asia.

Earlier this year, BlockTower said it hired former Goldman vice president Michael Bucella as head of strategic partnerships and business development.

April was an amazing month for crypto funds, according to research by Eurekahedge, with the Crypto-Currency Hedge Fund Index gaining 83.86% during that time.

Joe DiPasquale, the founder of BitBull Capital, a crypto fund of funds invested in seven firms, told Business Insider there is a unique blend between VC and hedge funds in the crypto space.

"BitBull is seeing a unique blending of equity (venture) and token (hedge fund) investing in crypto markets," DiPasquale said. "Investors in crypto are often excited by the exposure they get to new technologies - the venture-capital like dynamics - while getting extreme liquidity."

A spokesman for BlockTower declined to answer inquiries about the new fund.