A year ago, crypto was reaching ever new highs, and I was talking about whether ICOs would supplant the VC funding round and warning about Kim Jong Un’s crypto trading operations.
And then the world turned upside down.
Crypto prices are near rock-bottom prices, with Bitcoin hanging around $4,000 and Ethereum around $113, down from their highs earlier this year of around $16,600 and $1,400, respectively.
While that has put a dampener on the enthusiasm of a lot of cryptocurrency retail investors, the bigger question is how do institutional players work through this market? What’s the strategy for finding value in this technology sector long-term?
I chatted with Alexander Liegl, who may just have at least part of the answer. He’s the founder of Layer1, which announced a $2.1 million fundraise this week from Peter Thiel, Digital Currency Group and Jeffrey Tarrant.
Liegl saw a huge challenge in the blockchain and cryptocurrency spaces: too many good ideas and not enough developers working on product development work. So he decided to create an “activist fund for cryptocurrencies” that would “take concentrated bets on protocols that we think have a need in this world.” Layer1 then supplies developers and other experts to provide “infrastructure and support,” he explained. “An operating entity like us can have a lot of influence in moving the needle.” He describes Layer1 as “a combination of Polychain and Blockstreet” and “the Rocket Internet of crypto.”