Cryptocurrency has attracted a lot of investors. Ranging from wealthy individuals to VCs and hedge funds, exposure to Bitcoin is in high demand. Union Square Ventures has a long-term vision for its cryptocurrency portfolio. Even so, the company will not launch a dedicated fund just yet.
Union Square Ventures Is in for the Long Haul
Investing in Bitcoin and altcoins is a very risky venture. The volatility of these markets can lead to quick profits and steep losses. During 2018, the trend has been very negative, for the most part. Various cryptocurrency hedge funds are not giving up on this new form of money just yet. In fact, it seems the industry continues to attract big financial firms regardless of the current market sentiment.
Union Square Ventures unveiled their plans for Bitcoin and other cryptocurrencies. The company is making key investments and will maintain that portfolio for several years. A long-term investment strategy for cryptocurrency is more than warranted. Given the value increase of Bitcoin over the past nine years, short-term thinking will generate nominal profits.
Unlike other big firms, Union Square Ventures isn’t launching a cryptocurrency fund. An interesting choice, albeit the firm sees no need for doing so. Managing partner Albert Wenger is confident “keeping it under the same roof” is the best strategy at this time. Union Square Ventures is also investing in crypto firms, including Coinbase.
Attracting Institutional Money
For Bitcoin to grow, an influx of fresh capital is direly needed. When entities such as Union Square Ventures get on board, the market sentiment can change quickly. Over the past twelve months, the financial sector has shown a growing desire to get involved with cryptocurrencies. This can lead to more institutional money entering this industry in the years to come.
There will also be a strong focus on blockchain technology. This infrastructure powers all of the leading cryptocurrencies on the market today. For Union Square Ventures, finding the right blockchain can lead to big profits in the long run. Wenger confirms how the “winning blockchain might be worth a trillion dollars or more”. No cryptocurrency comes even close to such a market cap at this stage.
Diversification is key in the cryptocurrency world. Managing a balanced portfolio is always an advisable course of action. There is a lot more to cryptocurrency than just Bitcoin. Even so, the world’s leading cryptocurrency still has lots of growth potential. The Lightning Network is just the first big step toward a scalable environment for cryptocurrency to thrive.
Do you agree with the strategy being employed by Union Square Ventures? Let us know in the comments below.
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