Adam Cochran highlighted that crypto funding has slowed as venture capitalists prefer to focus on “breakout trends” rather than “moonshots.”
The cryptocurrency industry is rare in that the strong returns from Bitcoin and Ethereum allow venture capitalists to avoid the early-stage risks they must make in other industries, according to a venture capitalist.
“VCs have slowed investing in crypto by a lot, and it's a bit of a nuanced reason,” Adam Cochran, partner at venture capital firm Cinneamhain Ventures wrote in a thread of X posts on Aug. 9.
Cochran explained that most venture capital firms have Limited Partners (LPs) who are primarily interested in outperforming index fund returns. He added that, in the medium term, the risk-reward ratio of owning Bitcoin (BTC) and Ethereum (ETH) “will easily beat” index funds.
