Venture Capital Firms Shift Focus in Crypto Investments
Venture capital (VC) firms have become increasingly selective in their approach to investing in crypto projects. This shift marks a departure from previous investment cycles and is attributed to the maturation of the market, as noted by Eva Oberholzer, the chief investment officer at Ajna Capital.
In a conversation with Cointelegraph, Oberholzer explained, “It’s harder because we have reached a different stage in crypto, similar to every cycle we have seen for other technologies in the past.” This evolution in the market landscape has prompted VC firms to slow down on pre-seed investing, redirecting their focus towards established projects with clear, viable business models.
Oberholzer emphasized that today’s investment strategies prioritize predictable revenue models, institutional dependency, and irreversible adoption. She remarked, “What we see right now is that crypto is not driven by any memecoin frenzies or other trends, but it’s more about institutional adoption.”
Private fundraising deals among blockchain startup companies this week. Source: ICO Analytics
The Traditional Financial World Demands Yield and Revenue-Producing Crypto Businesses
The changing dynamics of VC activity reflect a broader trend within the financial world where traditional investors, including Wall Street firms, venture capitalists, and institutional funds, are increasingly seeking crypto projects that offer established and predictable revenue streams.
Currently, VC firms are concentrating their investments on stablecoin projects and other forms of payment infrastructure capable of generating consistent fees, according to Oberholzer.
Real-world asset tokenization (RWA) platforms have also garnered attention from VC firms due to their revenue models associated with minting and managing tokenized RWAs onchain.
The tokenized RWA market continues to grow. Source: RWA.XYZ
Driving Wall Street’s Interest in Ethereum (ETH)
Matt Hougan, the chief investment officer at Bitwise, recently highlighted the growing interest from Wall Street in Ethereum (ETH) due to the quest for yield. “If you take $1 billion of ETH and you put it into a company and you stake it, all of a sudden, you’re generating earnings. And investors are really used to companies that generate earnings,” Hougan noted.
Ethereum, as a smart contract layer-1 blockchain, hosts the majority of stablecoin, RWA market, and decentralized finance (DeFi) activities. These activities produce stable revenues through fees and other forms of financial rent, making Ethereum an attractive option for revenue-focused investors.
For more insights on the evolving landscape of venture capital investments in crypto, read the full article on Cointelegraph.
