In this article, we shall explore the largest cryptocurrency investors in the space.
The financial world has evolved in such a way that there have been more opportunities today for people to earn from their assets. The birth of cryptocurrencies opened up new means for people to grow their money.
Cryptocurrencies appreciate in value based on the change in its prices. However, people are most often scared of dipping their toes on this kind of investment since the market is incredibly volatile. This is why it is valuable to take a look at the most successful and prominent crypto investors.
What are Crypto Investors?
Similar to traditional investors, crypto investors are those who have used capital to buy assets, only instead of shares or foreign currencies, they bought cryptocurrencies. There are many ways and strategies to earn money from crypto investments. For this article, we will discuss the difference between a sole investor and a venture capital (VC) investor.
What Is a Solo Investor?
A solo investor is simply a person who holds cryptocurrency assets or participates in crypto trading activities. But, of course, their main goal is to maximize the profit-earning capacity of their digital assets. Some just simply hold cryptocurrencies and wait for its value to increase before selling them back to the market.
They earn profit based on the price difference of the asset when they first bought it and when it was sold. Take for example those who earned a lot from just holding Bitcoin back in December 2016 to 2017 when it held a value of $750 per BTC but went up to $20,000 by end of 2017. Those who had the opportunity to sell it at its peak value had mostly like made a fortune, depending on how much they had bought and sold.
Other ways to earn by being a solo investor is by trading, mining, or participating in yield farming opportunities. These are readily available in most crypto platforms. However, they do require a bit of technical knowledge on the part of the investor to execute such activities.
As with any type of investment, there are still risks that go along with these ventures.
What is a VC crypto investor?
There has been a rise in the number of venture capitalists in the field of cryptocurrency as well. Some call it ‘institutional capital.’
Basically, when we talk about VC investing in crypto, we refer to big firms or fund managers who invest in crypto startups to support their goals like expansion and introduction of new products.
Oftentimes, VC investors pour funds in early-stage startups to earn ownership stakes in that particular business. This is very simliar to the traditional VC financing that we encounter in tech companies today.
VC investors are also institutional investors looking to generate good profit returns out of promising crypto projects. If you look at the top investors in the cryptocurrency space, they would most likely be VCs since they have more capital.
Beyond the value of their holdings and the financial resources that they have at their disposal, VC firms are advantageous in the sense that they are composed of financial and crypto experts who know a lot about the field than most. These two main factors differentiate them from the retail crypto investors.
For many months already, the volume of institutional investments in crypto has grown. And from what we can see, this increase in interest from the VCs have also provided cryptocurrency projects with more capacity to innovate and introduce new use cases for digital assets.
Top Cryptocurrency Investors
Many crypto projects that are just starting to get their platforms off the ground look for institutional investors. And oftentimes, retail or solo investors take the investment of VCs as a green light to contribute in any particular project.
If you look at it, VCs have developed a reputation not only through the proven value of their investments, but also because their expertise has given them greater credibility than most people individuals in the space.
Digital Currency Group
Digital Currency Group is one of the biggest crypto fund manager in the space since 2013. Their first investment was in the crypto payment service called Bitpay. They are also one of the early VC funders for projects like Ripple and Coinbase.
Blockchain Capital focuses their VC investments on cryptocurrencies and other related companies. They also began in 2013, with their first investment channeled to Bitcoin. Since then, their investments are already spanning to a little over 30+ blockchain companies.
Pantera Capital is an investment firm and hedge fund manager, but they exclusively direct their investments in blockchain and cryptocurrency companies. Their first investment includes Ripple, one of the prominent crypto companies in the space today. Besides having over 30 VC investments under their belt, they actively participate in initial coin offerings (ICO) too.
Andreessen Horowitz, or a16z, belongs to one of the most prominent VC funds in the space today. As of late, they are managing a little over $3 billion assets in their portfolio. While they are not exclusively cryptocurrency investors, they have begun allocating a fund that is dedicated for that purpose alone.
Node Capital is a Beijing-based VC fund. It has been investing more into ICOs than early-stage funding. But beyond that, they have made most of their investments on companies such as Huobi and Trip.io.
Boost VC is a VC firm primarily investing in artificial intelligence and virtual reality, but with most of their investments directed to cryptocurrency startups. Boost has already invested in Coinbase and Ledger. The firm is co-founded by Adam Draper, son of the VC investor Tim Draper.
IDG Capital is also a multi-billion dollar VC firm. They have recently been making investments in the crypto space, including Ripple, Circle and Mars Financial, among others.
Draper Associates belongs to Tim Draper’s VC ecosystem. Tim Draper was first known for buying the Bitcoins confiscated by the US Marshall Service from the infamous Silkroad. Today, they are continuously investing in tech startups, including blockchain projects as well.
Ceyuan Ventures is a Beijing-based VC investor, focused on helping kickstart crypto startups in Asia. Some of their popular investments include Basic, Mars Finance, and Trip.io.
Lightspeed Venture Partners
Lightspeed Venture Partners is a multi-billion VC fund that has made multiple investments in cryptocurrency startups before. It was founded back in 2000. Apart from crypto companies, their popular investments include Snapchat, DoubleClick and AppDynamics.
While the two types of investors we discussed here differ in terms of volume, they both complement each other. Solo investors look into the decisions of big VC firms as well, with some of them even taking the volume of VC investment in a startup as a signal to invest in them as well.
The financial ecosystem that this creates not only benefits investors, but also the health of the whole cryptocurrency space. If there are no investors who believe in the promise of crypto, it wouldn’t last long enough to disprove those who do not believe in its promise.