What Did Top VCs Do With The Volatile Crypto Market Recently?

Key Points:

• Crypto VC investment is more rapid but depends more on trial and error and has considerably less regulation.
• The crypto venture also provides entrepreneurs that join them capital companies with significant skills and knowledge.

The year 2022 is looking to be more difficult for crypto venture capital companies. But, in the upcoming years, capital with a low-risk tolerance will continue to pour into the expanding crypto business. Knowing the major participants in the crypto VC industry as retail investors might be the difference between a successful and unsuccessful investment.

Crypto VC investment is more rapid but relies more on trial and error and has considerably less regulation. VC funds may and frequently do promote ventures via influencer marketing, making use of their connections in the sector. This might increase the validity of a project (if established VCs back it). It might also go wrong since the decentralized nature of the crypto business, and the introduction of technologies from traditional banking are at odds.

Expert advisers on cryptocurrencies claim that there are some parallels and differences between bitcoin venture capital and conventional venture capital. A group of investors that wish to enhance their profits by making an early investment in a company are referred to as VC funding in a wide sense. They assess various initiatives before funding them, calculating their market potential and potential for a favorable financial return. In order to lower their possible risks and uncertainties, VC companies spread out their assets.

There is nothing new about the growth of crypto venture capital firms. During the past several years, this pattern has changed. Due to the potential of cryptocurrencies across a range of businesses, traditional venture capital companies have begun investing in them. These investments may also yield large rewards.

Significantly, in 2022, venture capital companies invested billions in cryptocurrency ventures. And the rising trend is continuing. The ability to participate in a wider variety of initiatives than traditional VCs is one of the main benefits of cryptocurrency venture capital organizations. Investors may be able to become involved in initiatives early, thanks to crypto VC firms. Increased returns on investment may result from this.

Also, the distinctive structures of investments based on cryptocurrencies enable higher liquidity and cheaper transactions. This enables investors to act swiftly, profit from market fluctuations, and maintain tabs on new possibilities.

Crypto venture capital companies also provide entrepreneurs that join them with substantial skills and knowledge. Crypto venture capitalists have extensive knowledge of the cryptocurrency market, its underlying technologies, trends, etc. They may provide entrepreneurs with invaluable advice and networking opportunities to help them succeed in the crypto realm.

In fact, when ordinary crypto retail investors were trying to enter the market, some leading venture capital companies had already prepared ahead of time and made huge returns. By tracking the wallets of leading VCs, on-chain data analyst @Defi_Mochi focused on analyzing the specific returns of institutional investors such as a16z, Dragonfly, and Amber Group during the recent rebound in the cryptocurrency market. This article will clarify the companies in the industry that are investing in the current market.

Dragonfly

The overall size of Dragonfly’s portfolio increased by nearly 39.2% in the last month, mainly due to the institution’s holdings of LDO tokens worth about $41 million. Coingecko data shows that LDO has increased by 62.4% in the past 30 days. As of now, Dragonfly’s total known portfolio value is approximately $87.88 million.

As can be seen from the above figure, LDO’s investment portfolio in Dragonfly accounts for as much as 48% (nearly half), and the venture capital holds the second highest cryptocurrency holdings is TON, but the best performer is DG (as follows As shown in the figure, the rate of return is as high as 72.3%). The analysis found that most of Dragonfly’s holdings are protocol tokens focused on Liquid Staking Derivatives (LSD).

Wintermute

Wintermute also seems to be a “big fan” of LDO tokens, accounting for more than 17% of LDO in its investment portfolio, followed by GALA, DYDX, and MATIC. As of now, Wintermute has a total known portfolio value of $89,408,508.

An interesting finding is that Wintermute holds a large amount of HFT, accounting for 4.6%, ranking third among its holdings. It should be noted that Wintermute splits the holdings of HFT tokens into two wallets, so the proportion in the figure below may not be accurate. It is roughly estimated that the proportion of HFT tokens held by Wintermute should be about 10%, while HFT has gained a staggering 154.3% over the past 30 days. In addition, DYDX in the Wintermute portfolio has performed quite well recently.

Amber Group

At this stage, the on-chain data can only track Amber Group’s investment portfolio information of about $30 million. The results show that the institution has recently added FET tokens, and the amount is huge. It currently accounts for nearly 60% of its overall investment portfolio (worth about 2199 Ten thousand U.S. dollars). In addition, Amber Group currently still holds USDC, a stablecoin worth about $7 million.

On-chain data shows that Amber Group transferred FET out of Binance Exchange on February 14th, which means that they probably laid out the project tokens of artificial intelligence outlets in advance and purchased FET on the Binance platform, and then After the craze fades and gains are made, these tokens are transferred to their own on-chain addresses.

a16z

a16z’s known crypto portfolio size is over $100 million and currently stands at $109,713,485. In the encryption portfolio of this “veteran” investment institution, the most held are UNI (down 1.4%) and MKR (only up 6.2%), but the performance of these tokens has not been satisfactory recently.

Jump Crypto

At present, the total size of Jump Crypto’s crypto investment portfolio has reached $148,928,823, and their choices are also very good. In the past month, the institution’s crypto investment value has increased by 24%. Currently, the tokens with the most holdings are WBTC, WETH, and LDO and MATIC.

The analysis shows that both Jump Crypto and Wintermute have chosen to hold HFT. Interestingly, Polygon (MATIC), which is about to launch zkEVM, is also the common choice of these two investment institutions.

Paradigm

The investment portfolio of encryption/Web3 investment company Paradigm is very simple, LDO and MKR, of which LDO accounts for as much as 91%. As of now, Paradigm’s portfolio balance is approximately $220 million, up nearly 40% over the past month. In March last year, Paradigm led the $11 million seed round financing of Blur, an NFT market. It is reported that it holds BLUR, but the relevant address information is not yet clear.

DeFinance Capital

At present, DeFinance Capital’s crypto portfolio exposure that can be tracked is only about 14 million US dollars. Although the data shows that its LDO holdings account for about 28.3%, it is reported that the institution should hold more LDOs. It is worth mentioning that the second largest token held by DeFinance Capital is DODO, about 13.8%, an increase of 33.4% in the past 30 days.

Conclusion

At present, LDO is the most popular token held by top VCs. Of course, it is not difficult to understand the choice of this investment strategy, because based on the narrative of liquid mortgage derivatives and the upcoming hard fork of Ethereum in Shanghai, LDO is in the It should have great potential in the future. The second is Polygon (MATIC), which is expected to release the zkEVM mainnet in the first quarter of 2023, and some metaverse concept tokens DG and GALA, as well as HFT and DYDX.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

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