Sean Maguire, a crypto partner at Sequoia Capital, one of the venture capital firms most actively investing in the cryptocurrency space, gave his opinion on the future of many cryptocurrency ventures. In his opinion, many of the companies currently experimenting with crypto investments will “fall back” because of market conditions and a lack of understanding of cryptocurrency as an investment.
Sequoia partner is not optimistic about venture capital funds entering cryptocurrencies
Sean Maguire, a cryptocurrency partner at Sequoia Capital, one of the most active venture capital firms in the crypto sector, is not very optimistic about the future of other venture capital firms in the field. Maguire, who specializes in companies in the technology and crypto sectors that are in seed or early stage investing, said in a recent podcast that other firms now entering the crypto space will “pull back” from these investments as markets become less frothy.
However, he stated that Sequoia would not fall into this category because of the way these investments are made at the company. According to Maguire, the company has “constant intentions” when it comes to its investments in the sector. Maguire explained:
Sequoia takes a very measured approach to everything we do, and we spend a tremendous amount of time discussing every strategy change, everything, we discuss every seed investment to sometimes excruciating detail, but it helps us make really good decisions and make decisions as a team, not as individuals.
The firm, which has already invested in several companies in the sector such as Polygon, launched a $500 million to $600 million fund in February to invest in “liquid” crypto assets as a supplement to its other investments to “get more involved in protocols” and “better support just tokens.”
There will be other reasons for this rejection of crypto investing. According to Maguire, there is a fundamental misunderstanding of what cryptocurrencies and Web3 have to offer as new technologies, with some investors extolling decentralization as the “silver bullet.” Maguire stated:
Decentralization is not a silver bullet that will solve all problems and be better for everything. You know that for the vast majority of computing you want it to be centralized.
The influx of funds that blockchain-based companies have received from venture capital funds has been tremendous, fueled by the interest that NFT, Web3 and metaverse have generated in the market as trends this year. In the first quarter alone, venture capitalists invested $30 billion in fintech and crypto startups.
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