Earlier this week, crypto markets rallied after a sharp selloff, with Bitcoin down more than 15% and Ether experiencing its steepest drop since the FTX crash. This selloff, fueled by broader economic concerns and geopolitical factors, has increased market uncertainty. Curious to see if these events have prompted a significant shift in crypto fund strategy, I reached out to leading crypto investors who manage liquidity and hedge funds to find out what they are up to going forward.
Interestingly, despite the recent market turmoil, several cryptocurrency funds continue to focus on fundamentals and are taking a strong bullish stance on Solana (SOL). And the DeFi sector. Joe McCann, founder, CEO and CIO of Asymmetric Financial, said his firm, which manages two liquid funds with nine and eight figures in assets under management (AUM), is invested in Bitcoin and believes Solana is overvalued. “We owned exactly zero. Ethereum
-0.07%
“I don’t see any reason to own it all year round,” McCann said. “The relative value is 
brush
-3.68%
vs. ETH broke to new highs, validating our argument that SOL will continue to radically outperform ETH.”
Ryan Watkins, co-founder of Syncracy Capital, echoed this sentiment, highlighting Solana’s undervaluation relative to Ethereum. “Solana is currently competing with Ethereum on most meaningful metrics, yet it’s trading at 1/5th the valuation,” he told me. Watkins also expressed optimism about Solana’s ecosystem, calling it “mispriced” compared to Ethereum’s. “There are a handful of protocols generating $10-$50 million in revenue, growing 100%-1,000% year over year, and trading at S&P 500 multiples. That’s a fraction of what Ethereum’s competitors are.”
Watkins also pointed to DeFi and infrastructure, noting that Syncracy is seeing eight- to nine-figure revenues in these areas and growing at a triple-digit percentage rate annually. “We are very bullish on the cash flow assets that are leading these categories,” he said. Syncracy manages one liquid fund with nine-figure AUM, Watkins added.
Likewise, Kyle Samani, Managing Partner at Multicoin Capital, reaffirmed the firm’s commitment to Solana, while also expressing further confidence in the decentralized physical and virtual infrastructure network projects (DePIN and DeVIN) along with the stablecoin.
Maven 11’s portfolio manager, Ruben van den Eschoof, pointed to the global interest rate easing cycle as a catalyst for the growth of stablecoins and DeFi. He said that with more rate cuts expected, the stablecoin market is likely to grow further, which will significantly benefit DeFi. Van den Eschoof said Maven 11 is positioning itself accordingly by allocating to stablecoins like Maker and smaller DeFi tokens like Maple Finance.
Arthur Cheong, founder, CEO, and CIO of DeFiance Capital, said the firm’s focus has shifted to DeFi recently, citing strong product-market fit and attractive valuations. “DeFi is trading at its lowest valuation since 2020 relative to a variety of metrics/forces that we track,” Cheong said. DeFiance, on the other hand, has reduced its exposure to the crypto-AI sector as it needs more tangible growth and validation to warrant a higher valuation. DeFiance manages one liquid fund with AUM in the “high eight figures.”
Cosmo Jiang, a portfolio manager at Pantera Capital, emphasized that the firm continues to focus on fundamentals, focusing on blockspace, DeFi, DePIN, and AI. Jiang said that Pantera’s investments have been in Solana, Toncoin, Hivemapper, Geodnet, Near, and Bittensor, reflecting a broad interest in a variety of sectors. Jiang said that Pantera manages a mix of active and passive, open and closed-end vehicles, with a total AUM of over $1 billion.
Finally, Founders Fund’s Joey Krug said he has increased his personal allocation to “blue chip” DeFi assets, including Uniswap, Fantom, and Akash, each of which have promising catalysts in the medium to long term. While his ETH exposure remains high, Krug has reduced his Bitcoin holdings. “This is primarily because I think there is a good opportunity to increase exposure as altcoins have bottomed out relative to Bitcoin,” Krug said.
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