The high-profile crypto fund manager, Grayscale, recently detailed how its assets under management (AUM) have tripled over the past three months, surging past $2.7 billion. Their report underscores the long-awaited fountain of institutional money into the crypto ecosystem, and although the levels are analogous to late 2017, the market is much different this time.
As Nassim Taleb says, “Don’t tell me what you think, just tell me what’s in your portfolio.”
Surveying portfolios of fund managers in the crypto scene today, and you are most likely to come across asset portfolios dominated by bitcoin, some ethereum, and heavy interest in exchanges, custodians, and DeFi startups.
However, as the markets mature, and cryptocurrencies seeking to “replace” bitcoin fall into irrelevancy, it is likely that we will see investment extend beyond DeFi startups and into practical enterprise applications of blockchains. Facebook’s Libra is the contentious, flagship example of corporations pushing a new payment dynamic, but that story remains to unfold and is uncertain at best.
Conversely, other areas like cloud computing, web 3.0 apps, and IoT devices serve as promising mediums for disruption as institutional investment gears up to invest in a new wave of tech projects.
The Decentralized Web 3.0 and Cloud Computing
Blockstack’s recent SEC approval for a fully-regulated token sale has pushed the narrative of a more decentralized web 3.0 as a tangible development on the horizon as much more viable.
Blockstack already has a browser and desktop app, replete with numerous applications for users via a universal Blockstack ID. Similarly, developers can trivially build applications in JavaScript, with the back-end abstracted away — they can even receive grants for attracting users to their apps from Blockstack.
The salient takeaway is that the user-friendly applications ultimately lowers the barrier to entry of decentralized apps significantly for mainstream users, potentially ushering in vast portions of users to the web 3.0 — ample investment opportunity for institutions. Imagine privacy-preserving apps that don’t expose data to third-parties or big tech, and the consequent demand from the public as the premium on digital privacy increases.
The concept of the web 3.0 can be extrapolated beyond the user-facing portion, however.
For example, DeepCloud AI is a rising decentralized cloud computing platform for web 3.0 apps and IoT edge devices. The goal is to furnish the type of infrastructure that can supplement enterprise supply chain needs, smart cities, and more using AI-based resource allocation that functions effectively close to the edge — congruent with the connectivity demands of IoT devices.
No more instances of CloudFlare and Verizon outages, inefficient connections with major cloud service providers like Azure, and poor connectivity in remote areas. Eventually, fluid marketplaces of resource providers, developers, and enterprises can operate more robust networks using systems like DeepCloud AI.
The firm even recently partnered with the Mexican government to bring blockchain-based vehicle registration to the state of Coahuila.
For institutional investors, as more enterprises join efficient networks like DeepCloud AI, and developers focus on creating apps for the decentralized web (i.e., Blockstack), investment in such ecosystems/markets will appear an appetizing choice.
Some institutional investors, like LD Capital, are taking a proactive approach. LD Capital recently partnered with DeepCloud AI as a strategic investor in a bid to position itself in what seems like the inevitable rise of more distributed networking across layers of the Internet.
“LD Capital’s team spread over China, the United States, Europe, Singapore, Japan, and South Korea, and have accumulated rich experience in areas of traditional internet, Fintech, and advanced blockchain technology,” detailed the DeepCloud AI team in the announcement. “LD Capital is committed to the globalization of blockchain and quality investment in the entire industry.”
While the bulk of institutional money may still be parked on the sidelines when it comes to crypto, the development of the underlying technology and its practical applications may soon change that narrative.
Fund managers have a large concentration of their funds allocated to the likes of bitcoin, exchanges, and other financial entities, but the web 3.0 is on the horizon — unveiling a new paradigm for the Internet’s users, and investment opportunities to boot.