Way back in 2012, we published a story about Usman Majeed, a young entrepreneur running an electronics reseller business called Tech Twurl out of his Michigan State University dorm room. He graduated with a computer science degree in 2015 and shut down Tech Twurl soon after, but the desire to run his own company remained.
Majeed is back with a new venture, a cryptocurrency hedge fund called Mutual Coin Fund. With the value of a single bitcoin now north of $17,000, cryptocurrency is blazing hot and even seasoned investors are looking to get in on the action—but they often don’t know where or how to start.
Cryptocurrencies are a digital form of money meant to be more secure and decentralized than traditional currencies and banking. Bitcoin, created in 2009, is the most well-known cryptocurrency, but there are roughly 1,000 others trading online. Because crypto was born on the Internet, many of its proponents are techy types—specifically, young techy types. New York University professor Scott Galloway called bitcoin “a millennial mistrust index” when discussing it this week on CNBC.
Majeed concedes that his youth is a factor in his success. Over the summer, he says, he kept hearing from his mentors, a few from Fortune 500 companies. They were calling for guidance on cryptocurrency investing, since Majeed had a longstanding crypto trading account, and the idea for his own hedge fund was born.
Majeed first dabbled with cryptocurrency in 2011. “I had $500 I was thinking of putting into bitcoin, but I started Tech Twurl instead,” he recalls. “That’s a big regret.”
In 2013, when the value of a single bitcoin began to double and triple, Majeed started mining the currency. Bitcoin mining, according to Investopedia, is “the process by which transactions are verified and added to the public ledger, known as the blockchain, and also the means through which new bitcoin are released.” To add to the blockchain, miners must first solve complicated puzzles that involve math and algorithms, Majeed says. In return, they pocket transaction fees.
Anyone with the proper hardware and an Internet connection can mine bitcoin, and that part is key—Majeed started to mine them because he was still living in the dorms, where electricity, the biggest cost associated with bitcoin mining, was included as part of his dorm fees . “We were using 12 GPUs (graphics processing units), and we kept tripping the circuit breaker,” he says. “We did it for a few months, but it wasn’t scalable.”
However, he kept his crypto earningsand figured he’d eventually use them for his own personal investing. That ended up being a prescient decision, as the backlog for verifying new crypto users kept getting longer. (Majeed says the biggest barrier to crypto investing is the bottleneck new participants experience, which has intensified in the past year.) Last March, after he successfully invested in Ethereum, another nascent cryptocurrency, Majeed decided to create a separate account to handle assets for investors interested in the crypto space.
Within a few weeks, he raised an initial round of $250,000 from accredited investors, “then more people found us on Google,” he says. The firm began officially handling
