Sequoia Capital Partner Believes Lots of VCs Will Pull Back From Crypto – Shaun Maguire, a cryptocurrency partner at Sequoia Capital, one of the most active VC firms in the crypto space, is skeptical of other VC firms in the space.
In a recent podcast, Maguire, who specializes in early-stage investments in the tech and crypto industries, claimed that other firms that are currently joining the crypto sector will “draw back” on their investments when the markets become less frothy.
Sequoia, on the other hand, will not be included in this category due to the manner in which the firm’s investments are made. When it comes to its investments in the area, Maguire says the firm has “permanent intentions.” Maguire elaborated:
“Sequoia is very deliberate in everything we do, and we spend a lot of time debating every strategy change, everything, and we argue every seed investment to agonizing detail, but this allows us to make really smart decisions and make them as a team rather than as individuals.”
In February, the firm formed a $500-600 million fund to invest in “liquid” crypto assets as a complement to its existing investments to “participate more actively in protocols” and “better support token-only initiatives.” It has already invested in many companies in the area, including Polygon.
Other factors will contribute to the abandoning of crypto assets. According to Maguire, there is a fundamental misunderstanding of what bitcoin and Web3 as new technologies may offer, with some investors portraying decentralization as a “silver bullet.”
“Decentralization isn’t a silver bullet that solves all problems and makes everything better. You already know that you want the vast bulk of computation to be centralized.”
The interest that the market has generated in NFTs, Web3, and metaverse as trends this year has spurred a tremendous influx of venture capital money into blockchain-based enterprises. VC firms invested $30 billion in fintech and crypto startups in the first quarter alone.