Union Square Venture (USV), the New-York-based venture capital firm is to start a single cryptocurrency and blockchain 10-year investment plan. According to Albert Wenger, managing partner of USV, the company does not plan on splitting the fund in two, as they see “a lot of upside to keeping it under the same roof.”
Keeping an emphasis on investing in technology supporting applications and not the apps themselves, USV is optimistic about the industry in the long-term, despite the current decline of the cryptocurrency market. According to Wenger “Investors are rationally pouring a lot of money into this sector, because I think people are seeing the winning blockchain here might be worth a trillion, or a couple of trillion dollars.”
Nevertheless one has to acknowledge the potential threats and voicing a similar concern to Apple co-founder Steve Wozniak, that blockchain could turn out to be a bubble, Wenger claimed that if investors reasonably spread their investments, the risk could pay off. “Certainly, for any one particular project there's an extremely high chance it won't work, as a result, if it works, the rewards will be very high.”
Even though USV has high hopes for blockchain and cryptocurrency, their faith in initial coin offerings (ICO) is not as high. Calling then an “innovative new finance mechanism”, Wenger has his doubts about the relevance of ICO as a means of raising money for every blockchain project. Wenger asserts that the amount raised by ICO is not always an indicator of success, arguing that "very interesting projects are also being pulled off on a lot, lot, lot less money."