Recent data suggest that traditional venture capital companies (VCs) are gradually starting to diversify their portfolios by investing in cryptocurrency and blockchain projects like never before.
It is not surprising that venture capital companies specializing in financing blockchain projects are at the top of the list. But traditional VC companies are slowly starting to recover, making cryptocurrency-based investments a larger portion of their portfolios.
Family names like 500 Startups and Andressen Horowitz became the top 10 after showing continued interest in funding blockchain projects. The study – put together by Crypto Finance Conference and shared exclusively with Hard Fork – highlighted how traditional risk capital is spreading their risk by investing in specialized blockchain and start-up funds.
Boost VC is at the top of the list of companies of this nature, with 30% of its portfolio consisting of companies based on cryptocurrency. Among its 42 crypto-investments, the Boost VC portfolio bets on Etherscan, Coinbase and VC company specialized in blockchain, Polychain Capital.
"Polychain Capital, the tenth [sic] investor in the list, is in the portfolio of several investors of high rank. " CEO of Crypto Finance Conference Andrea-Franco Stöhr said. "This suggests that some venture capital firms and investors want to benefit from the growing crypto economy, but feel they do not have the time or expertise to invest on their own."
Outside the top 10, ZhenFund, Navik Ravikant, GV, and The Capital Foundation are other big names that finance multiple cryptocurrency projects.
This increase from traditional VC companies creates competition, highlighting the belief in the potential of the blockchain. VC companies tend to distribute risk with a diversified portfolio that ensures consistent and constant returns. The data suggest that the blockchain and cryptocurrency projects are becoming less risky or that there are substantial gains.
In fact, the fourth item on the list is Pantera Capital, a company that specializes in blockchain investments, which recently boasted the fund posted a return of over 10,000 percent in its first five years. Enough payment if you do not mind covering the risk.
Stöhr added that, "Sometimes, investors turn to new technologies simply to add risks to their portfolios. "
As mentioned earlier Investors focused on blockchain as Digital Currency Group (DCG) and Blockchain Capital (BC) are the most active investors in the cryptocurrency space. While all DCG 97 investments are in blockchain-based business, and only one out of 59 BC investments are not linked to the blockchain.
This is not all that surprising in light of other recent research that is showing that growth most of the ICOs is now being undertaken in private investment rounds, rather than being open to the public.
The Crypto Finance Conference used data from Crunchbase to compile statistics, then ranked them based on the number of investments in cryptocurrency or blockchain portfolios. Unfortunately, one thing missing from the data is the value of each investment.
Bloomberg reports that the first offers of coins (ICO) – once reserved for small investors – are becoming exclusively for wealthy investment companies. In the case of Telegram, it in particular canceled the sale of public tokens to private investors
This technology aims to fuel a decentralized revolution – changing the way we connect and interact digitally. Having private ICOs and companies funded by venture capitalists turns this notion somehow in the lead.
Published August 9, 2018 – 12:11 UTC