Weekly Newsletter,
Cambridge Associates advising clients to invest 1-2% in blockchain VC
Cambridge Associates’ latest analysis offers rare institutional validation: crypto VC is emerging as a defined asset class where manager selection drives outcomes.
Every few years, a traditional institution publishes a piece that tells you where allocator sentiment is heading. Cambridge Associates just did that with a new report on blockchain venture whose message is clear: crypto VC is now considered a legitimate, durable part of a modern venture allocation.
Over the last decade, blockchain VC funds delivered a pooled 21% net IRR, meaningfully above the broader venture benchmark. The dispersion looks exactly like traditional early-stage venture: top managers significantly outperform while bottom quartile lags. This reinforces a key point: this is a manager-selection asset class, not a passive one.
Cambridge also stresses something we have long emphasized to LPs: the return drivers of crypto VC cannot be replicated through liquid tokens. Tokens now behave much like public markets, reacting to flows and sentiment. Venture, by contrast, gives access to the projects building the core infrastructure long before it becomes investable in liquid form. It is a different return engine altogether, and one that only specialist managers can capture.
The conclusion is surprisingly explicit for a traditional institution: long-horizon allocators should consider a 1–2% total-portfolio allocation to crypto VC, provided they invest through specialist managers with deep technical understanding and a track record through multiple cycles.
For a sector that spent years fighting for legitimacy, this may be the strongest signal yet. Crypto VC is no longer a contrarian punt: it is becoming a strategic allocation where doing the homework matters, and where outcomes depend heavily on selecting the few managers who can consistently navigate this market.
Also this week
- BNPL firm Klarna announces USD stablecoin
- Polymarket gets green light from CFTC to reenter U.S. market
- South Korea's Upbit eyes Nasdaq listing
- Revolut reaches $75 billion valuation
- Robinhood to launch new derivatives exchange for prediction markets push
- America's fifth-largest bank US Bancorp tests stablecoin
Relevant financial updates
- Irys*, a decentralized protocol that combines scalable data storage with programmable execution capabilities within a single Layer-1 blockchain, had its TGE and is currently trading at a $400mln FDV
- Kinetiq*, a liquid staking protocol on Hyperliquid that autonomously delegates HYPE to high-performing validators based on performance and decentralization metrics, had its TGE and is currently trading at a $156mln FDV
- LedgerX, a cryptocurrency exchange offering futures, options, and token swaps, has been acquired by Robinhood for an undisclosed amount
- Fordefi*, an institutional MPC wallet platform for DeFi, has been acquired by Paxos for an undisclosed amount
- Monad*, a Layer 1 blockchain platform offering 10,000 transactions per second, 1-second block time, and single-slot, has raised $188mln in a Public Token Sale. It then had its TGE and is currently trading at a $3.6bln FDV
- Figure*, a financial firm specializing in home equity lending and related loan products, including DSCR and crypto-backed loans, has raised $25mln in a Strategic funding round with investments from Ondo Finance*
- SpaceComputer*, a satellite-based cryptographic infrastructure platform that provides tamper-resistant computing services for decentralized applications, has raised $10mln in a Seed funding round with investments from Hashkey Capital, CMS Holdings, Amber Group, Maven 11 Capital, Lattice Capital and 25 others.
*Underlying TBV portfolio position | Prices as per 28/11