I wrote an article earlier and shared with you how traditional institutional investors such as Grayscale, MicroStrategy, Twitter CEO’s CashApp, etc. invest in Bitcoin. This type of institutional investors basically belongs to the more traditional style of investors. They mainly look at Bitcoin from the perspective of traditional institutional investors such as security and liquidity, and regard Bitcoin as an asset similar to gold.

They focus on models they can understand, and tend to invest in assets that are closer to traditional concepts. They invest more in Bitcoin and less or even nothing in Ethereum. The CEO of Twitter made it clear that he believes that the only digital currency with value is Bitcoin.

In fact, there are still a large number of venture funds investing in currency circle projects. They invest in blockchain projects completely from the perspective of blockchain ecology, and focus more on the future potential and value of the project.

Famous funds among these institutional investors include Fenbushi Capital, Polychain Capital, Coinbase, etc. For general digital currency investors, the names of these institutional investors may be relatively unfamiliar, and their investment methods are even more unfamiliar.

The style of this type of investor can be seen through the following two recent sources:

News one:

On October 19, according to a tweet by Alex Svanevik, CEO of the data analysis company Nansen, the wallet marked Polychain Capital recently received 329 YFI from Binance Exchange, worth about $4.6 million.

The Polychain Capital mentioned in this news is the investment fund that focuses on blockchain projects listed above. It was founded by Olaf Carlson-Wee, the former No. 1 employee of Coinbase, and currently manages over $300 million in assets. Its investment projects or companies include Coinbase, Matrixport, Oasis Labs, Compound, and Nervos.

Message two:

On November 10, Balancer Labs, the project owner of the decentralized finance (DeFi) protocol, has raised a round of million-dollar funding by selling its governance token BAL, and the participants are investment institutions Pantera Capital and Alameda Research.

Although Balancer officially did not announce the amount of this round of financing, according to Alameda founder Sam Bankman Fried (SBF), his company invested a seven-figure dollar amount for this, that is, at least $1 million, and Pantera Capital did not immediately Responding to a request for comment.

Pantera Capital here is a venture capital fund established in 2003. In addition to investing in Balancer, it has also invested in the currency circle project Thundercore.

Alameda Research was established in 2017, and its invested projects or companies include Perpetual Protocol, Frontier, Hedget, RAMP, Linear Finance, etc.

These funds are well-deserved blockchain venture capital funds in terms of the projects they invest in. In particular, Polychain Capital and Alameda Research have invested in a large number of DeFi projects.

I think there are two things that deserve our attention the most:

1. Everyone is afraid but I am greedy

The time for these three funds to buy or invest in these DeFi projects is October and November.

As we all know, this round of DeFi tide started in June this year, reached its peak in mid-September, and then began to fall into a round of large declines, and then began to consolidate at the bottom since early October until recently, and gradually recovered some popularity.

The period from the beginning of October to now is when a large group of investors shouted "DeFi is cool", but on the other side, institutional investors are boldly entering the market to buy projects they think are valuable.

This is the "greedy while fearful" approach to investing that I admire the most.

2. Unafraid to seize value projects when the market is low

From the news data, we can analyze that the average cost of Polychain Capital to buy YFI is 14,000 US dollars, and the peak of YFI has reached 40,000 US dollars. Compared with the peak value, when the fund bought, the price has dropped by 65%.

Pantera Capital and Alameda Research bought the Balancer token BAL within $15, while the peak value of BAL once reached $34. Compared with the peak value, when the fund bought, the price had fallen by 56%.

In this round of sharp drop of DeFi tokens, countless small and medium-sized retail investors either ran away in a panic or watched dejectedly in the face of the endless downtrend, while these institutional investors are entering the market with large sums. The buying price of these institutions may not be the lowest price when they enter the market, but they are still not afraid of the market and make bold moves. I believe they must think that these projects have long-term value, and boldly buy them when the market is low enough to judge that there is not much room for decline.

In the October 25 article "Cryptocurrency Current Investment Logic", I wrote "If these DeFi projects are valuable in the long run, and the current price is so low, should we make bold decisions at this time?"

Sharing the investment behavior of these three venture funds with you today is not to ask you what projects to invest in now, but to use data to show you how venture funds deploy projects when the market is frightening.

Finally, I would like to emphasize that the article has also focused on the analysis in the past two days. According to the short-term price increase, there is no rush to make deposits recently. Those who bought coins for long-term investment before will continue to hold them patiently, and there is no need to throw them away just to make a little money. .