Decentralized finance (DeFi), nonfungible tokens, and companies involved with them are apparently the favorites of cryptocurrency venture capital firms.
What Happened: According to a Thursday Fortune report, Andreessen Horowitz’s General Partner, Katie Haun, pointed out that “there’s a mainstream recognition now that crypto is more of an architecture and operating system, and that all kinds of products and services can be built on top of” it.
Two of those products and services are DeFi protocols and NFTs, which are seemingly a favorite kind of investment for venture capital firms specialized in cryptocurrency.
Haun noted that the NFT market is one to which she pays particular attention. The firm so far invested in NFT marketplace OpenSea — leading a $100 million funding round — and NFT racehorse game company Virtually Human Studio.
Director of Innovation at digital-asset investment firm Polyient, Craig Russo, even suggested that NFTs caught the attention of “anyone who missed out on the expansion and growth of Instagram” now “is looking at NFTs as a new frontier.”
Why It’s Important: DeFi protocols also caught the attention of big-name venture capital funds.
Co-Chief Investment Officer of Pantera Capital, Joey Krug, believes that DeFi is “going to be as transformative to finance as the Internet was to information” since it is replicating every component of traditional finance.
The firm she is leading joined a seed funding round for decentralized finance protocol insurance service Risk Harbour.
Volatility Is No Longer An Obstacle: Venture capital leaders also seemingly share the idea that the ongoing correction in the cryptocurrency market is not the beginning of a long downtrend.
Krug explicitly said that he does not expect a multi-year bear market to be starting, while Haun pointed out that larger investors are not viewing crypto as a moonshot investment anymore.
While 2018’s crypto bear market caused some market participants to abandon the still-nascent asset class, this is purportedly not happening this time.
Haun explained that investors have “seen that the experiment is working” and added that “it’s kind of a given now on the part of these institutions that crypto is not going anywhere.”
Read More: www.benzinga.com