As the digital asset industry gains momentum again, some crypto funds are looking to focus on specific sectors.
Cryptocurrency fund Asymmetric Financial is creating Bitcoin DeFi Venture Fund I to focus on investing in the early areas of blockchain, with a goal of raising $21 million. The fund will be spearheaded by general partner Dan Held, former Kraken director of growth and longtime Bitcoiner.
Decentralized finance, or DeFi, uses blockchain-specific technology (in this case Bitcoin) as a way for market participants and individual investors to transact directly with each other, typically through self-executing contracts, and with third parties or institutions. eliminates the need for Targeted uses for DeFi include, for example, decentralized lending and borrowing applications that allow individuals to access capital without providing a credit score.
Held will work with Joe McCann, the company's CEO and CIO, on additional “contrarian bets.” Mr. Held has been a driving force behind the advancement of DeFi in the Bitcoin ecosystem for many years, serving as a marketing advisor for Taproot Wizards, focused on Ordinals, and Trustmachine, focused on Bitcoin applications.
“I put my boots on and saw the traction of NFTs on Bitcoin and the lending and borrowing based on Bitcoin that can and will be built,” Held said. “The Bitcoin ecosystem is missing a really important role.”
Currently, there are very few crypto venture capital firms investing in Bitcoin-centric startups, and those investing in crypto venture capital firms such as DeFi, Layer 2 (L2) scaling networks, Ordinals, decentralized applications (dApps), etc. It often deviates from the blockchain subsector.
“Most crypto VCs don't recognize Bitcoin as an investment,” Held said. He added that many Bitcoin-focused VCs ignore DeFi because it's speculative, and broader crypto VCs see it as a “dead rock of the boom.”
But he's convinced both sides are wrong. “There is a new wave coming that I have seen for years. Now is the perfect time to do it and we are at the beginning of the next cycle with a lot of talent coming on board.” I guess.”
Held points to L2, a Layer 2 blockchain that offers faster speeds and higher throughput than Layer 1 blockchains like Bitcoin, and “meta-protocols” made up of ordinal and other similar actions like NFTs. I see it as having the best chance. While much of this activity is centered around the Ethereum blockchain, Held believes the Bitcoin blockchain has great future potential as an ecosystem.
“When you build L2 architectures and dApps, you want to build on top of the most popular chains by unique users, volume, liquidity, and value,” believes Held. “Bitcoin is a $1 trillion asset, all of which is waiting to be released into DeFi and collateral.”
According to data from CoinMarketCap, Bitcoin's market capitalization currently accounts for approximately 51.2% of the total market capitalization (approximately $2.05 trillion).
“Why build on top of the Apple App Store or the Google Play Store? Because that's where the users are,” Held said. “Bitcoin arguably has the largest network in terms of ownership and liquidity. Investing and building in this space is a no-brainer.”
Although the Bitcoin NFT ecosystem is fairly new, Held noted that on some days there is more NFT trading volume for Bitcoin than for Ethereum. According to data from CryptoSlam, in the past 30 days, NFT sales on the Bitcoin blockchain exceeded $279 million, of which approximately $54.7 million came from Ordinals, second only to Ethereum with sales of $527. It became a big chain. “This is early and new, but he is one of the key areas to watch,” Held added.
Held is not the only one bullish on building on top of Bitcoin. In general, market participants are speculating that L2 Chain, which extends Bitcoin, will see a number of large funding rounds this year, indicating budding interest in the space. .
However, Held recognizes that building on top of Bitcoin will be more difficult than other chains, given that the L2 infrastructure is in its early stages and there are fewer developers focused on the ecosystem. doing. In a similar vein, Held said Bitcoin developers and users use L2 to “do fun things” rather than building the blockchain itself.
“Bitcoin’s L2 is even more attractive than Ethereum because of its increased expressiveness.”
The team declined to say how much it has raised so far, but said “the interest has been overwhelming” and that existing capital has come from ultra-high net worth individuals and funds of funds. The fund primarily invests in token-based transactions, but also considers stocks. Beyond writing checks, Held hopes to use his years of expertise as a Bitcoin marketer and operator to help each project with brand positioning, customer acquisition, and deeper market exploration. I am.
Overall, Held believes that the next “DeFi summer” (a term used to describe when the DeFi space explodes) will happen for Bitcoin in 2025, or as developers build out infrastructure quickly. He said he thinks it will probably happen sooner. “It will be a Bitcoin DeFi renaissance.”
“Bitcoin is worth more than all other crypto assets combined,” Held added. “This is the largest asset to be unlocked and use its funds in DeFi, and this is the largest opportunity that will ever exist in cryptocurrencies.”