A New York-based venture capital firm, Union Square Ventures that manages over $1 billion in assets, has given the cryptocurrency investing industry a big boost by saying about its belief in the potentially worth of trillions in the future.
The leading VC firm has already heavily invested in the popular San Francisco-based cryptocurrency exchange, Coinbase. However, it currently has no plans to launch a stand-alone fund.
Investors could strike it rich
Managing Partner, Albert Wenger told CNBC that his firm was investing in the “foundational plumbing” of the industry. He also added that he believes it is not completely crazy to consider that investors could strike it rich should they invest in the right project.
“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. It’s not at all crazy to think that.”
“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.”
$330 million cryptocurrency fund
Wegner’s firm is the main competition for Andreessen Horowitz’s Silicon Valley Venture Capital (VC) firm who recently announced that they were launching $330 million in a cryptocurrency fund. The fund will focus primarily on the non-speculative use cases of blockchain technology.
When it comes to investing in crypto and blockchain, Wegner doesn’t think that Bitcoin is the way to go. Rather than placing all bets on BTC, he advises an approach of cautious diversification that is able to yield the best results. He explained:
“I don’t think you should be in the space and say ‘I’m only going to hold bitcoin.’ At the moment, this whole space is a high-risk space, and I don’t think anybody should be investing all of their life savings.” He added: “The stuff that actually works will float to the top. It might take a while, but time will tell.”
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