Although market sentiment is falling, some large financial firms are joining the cryptocurrency sector at an alarmingly quick rate. On June 29, 2018, Union Squares Ventures announced its plans to invest in cryptocurrency and blockchain-related businesses over the course of the next decade.
Plans to Invest Without Dedicated Fund
Despite its plans to invest on a long-term basis in the potential trillion-dollar blockchain industry, Union Square Ventures has yet to start a fund devoted to cryptocurrency. This is due to the New York-based firm’s wariness of the freshness of the cryptocurrency sector.
While current bear markets drive retail investor sentiment to lows, it seems institutional capital is seizing the opportunity to get in on a long-term basis.
Albert Wenger, Managing partner at Union Square Ventures told CNBC:
“Investors are rationally pouring a lot of money into this sector, because I think people are seeing the winning blockchain here might be worth a trillion, or a couple of trillion dollars.”
Sharing an identical sentiment with Apple co-founder, Steve Wozniak, Wenger expressed that Union Square Ventures was still extremely cautious of the fervor surrounding ICOs which resembled that of the 90’s dot-com bubble. On the other hand, Wenger also conceded that the emergence of many projects during the early phases in the sector will be undoubtedly staggering and profitable.
“Certainly, for any one particular project there’s an extremely high chance it won’t work. As a result, if it works, the rewards will be very high.”
Wenger also warned projects that utilised ICO funding to amass large amounts of money without justifiable product concepts against banking on their funding as a valid measure of success.
“The amount you’ve raised in an ICO or in a traditional way in this space is not going to turn out to be a great predictor of success. Very interesting projects are also being pulled off on a lot, lot, lot less money.”
It has become noticeable that the speculation that fed a once free reign industry has come to an end and has been instead, replaced by legitimate market forces.
On June 26, Silicon Valley investment giant Andreessen Horowitz started a $300 million “all weather” crypto fund and disclosed that they have already invested in cryptocurrencies for the last 5 years.
As an increasing number of funds join the sector, it seems certain that global adoption and application of cryptocurrencies will emerge to become the norm.