1/ Have been thinking about the evolution of VC investing in crypto, if we believe it to be as big or bigger than the internet shift of the late 90s and mobile of the 00s. Today, there are no more “internet” or “mobile” tech investors. To not be is to be irrelevant.

2/ In the last 5 years, early in the cycle, crypto-focused VC funds, mostly early-stage, achieved 5-100x returns with both index and concentrated strategies, with significant gains from those early in DeFi. Mean returns 7-8x. Notable funds all 10x+.

3/ This yr, generalist VCs and HFs have entered, while crypto-native funds have raised or grown larger from asset value growth. Crypto funding is on track to more than 10x this year vs 2020. Valuations grew commensurately.

4/ And still it feels so early. Current total mkt cap of all tokens is similar to that of just MSFT ($2.5T). There is still under 10M unique participants in DeFi. There is ~same daily txns on Eth as there are on Nasdaq in seconds.

5/ How will crypto investing evolve? Some predictions: (1) In the next 12-24 months, VCs with focused crypto expertise and a flexible mandate to fully participate in token investment and governance will continue to dominate, especially in early stage.