Opinion: Cryptocurrency venture capital is slowing down its investment pace. Holding BTC/ETH can yield considerable returns, and the lack of new narratives is a key reason
Adam Cochran, a partner at Cinneamhain Ventures, posted on social media that venture capital firms have significantly slowed their investment in cryptocurrencies for a subtle reason. Most venture capital firms have limited partners (LPs), and LPs are primarily interested in returns beyond those of index funds. However, in the medium term, just holding Bitcoin and Ethereum can "easily beat" index funds in terms of risk return rate. This allows venture capitalists to take a wait-and-see approach to Bitcoin and Ethereum, waiting for safer and more profitable opportunities rather than taking on so much early risk with startups as they do in other industries because there are no assets like BTC or ETH that provide coin-holding returns in other markets.
Adam Cochran stated that during the last crypto cycle (2020 to 2024), venture capital firms "seemed very active", hoping to get rich by investing in "already exploded" applications along with participants. But now it's not clear what the next step should be as several known narratives (NFTS, AMM forks, defi, L2s) have already reached their end.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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