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Messari Q3 report: Public chain projects become standard in the portfolio of crypto funds, and the storage sector is gradually hot

Messari

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The total potential market of smart contract and DEX is large

Messari Q3 Report: Crypto Fund Flow Portfolio Analysis, Replicable for Ordinary Investors

Mason Nystrom

Messari

Smart money investors -- venture capital funds, hedge funds, liquidity providers -- are investing in DeFi, NFT, Web3, Infrastructure, metaverse, depending on the growth stage (from less than $50 million to more than $1 billion).

We track many of the top venture capital (VC) firms and hedge funds in the crypto space and document their liquid portfolios (assets traded on the market). This could of course miss out on equity or online investments that have yet to come online.

Overall, our analysis shows that a total of 53 funds hold 228 unique assets across different sectors, including smart contracts, DeFi, Web3, extensions, interoperability and NFT.

To find a list of portfolio filters, access the Messari filter, which can be viewed in the Community section:

- A16z

- Alameda Research

- Dragonfly Capital

- Electric Capital

- Fabric Ventures

- Framework Ventures

- The LAO

- Delphi Digital Ventures

The openness of these portfolios, and the availability of most crypto assets, ensures that both institutional and ordinary investors can participate (and may lose).

1. Analysis of Messari Fund

A quick review of Q2 Messari filter analysis. Messari did the same analysis in April, when there were only 35 funds, and the top five holdings were: Polkadot, Terra, NEAR Protocol, Oasis, Solana.

Q3 Messari filter analysis

After analyzing all the portfolios, we found that the largest asset invested in the 53 funds we track is still Polkadot (DOT). In fact, 21 of the 53 funds have DOT, which means that 39% of the funds we track have a vested interest in Polkadot's success. An important consequence of this is that large DOT holding funds may be the ultimate determinant of which projects receive the first few parallel chains.

Note that we assume most of these funds hold Ethereum and Bitcoin, so we omit them from our analysis.

The second most popular asset among the portfolios tracked was NEAR Protocol, Terra and Ooasis Network, all tied. Terra (LUNA), an algorithmic, seigniorage shared stabecoin platform, recently enabled IBC connectivity to the Cosmos ecosystem. Near Protocol (Near) and Oasis Network (ROSE) are smart contract platforms, but have so far seen low adoption rates compared to competitors like Solana, Ethereum, Cosmos and Avalanche.

Arweave, Maker, Nervos Network and Solana rank fifth among fund holdings. It's worth noting that Arweave's stock is up significantly from last quarter's analysis.

Among the most invested assets, Solana has the highest float market value (BTC and ETH are omitted). DODO has the lower float market value of the assets owned by the top 15 funds, while Arweave has the lower float market value of the top 5 funds.

Similar to last quarter, venture capitalists clearly see a large amount of potential market volume in the smart contract space and DEX space, as they are the most frequently invested areas in top capital assets.

However, it's worth noting that while file storage is a unique category, it has a strong market share compared to other niches. Finally, with Web3 in The spotlight, more venture capital investors are looking for data management type agreements, including indexers like The Graph and Covalent. While The Graph is still The premier indexer, competitor Covalent has received strong support from a variety of companies, pushing it into The top 50 portfolio.

2 Final idea: Invest like a cryptocurrency fund

Investing like a cryptocurrency fund, risk or hedging has never been easier. An average investor can copy exactly these portfolios and mimic any of their favorite funds. But while on the face of it, copying a trade with a well-known venture capital firm may be a good strategy, it's important to remember that unaccredited or professional investors still don't have equal opportunities.

Most of these funds typically receive private placements at much lower valuations, while funds focused on short-term investments are waiting to liquidate some of the tokens that have generated record profits for investors. In addition, liquid assets, especially newer projects, typically trade at a premium in anticipation of higher future valuations during bull markets.

While there are still barriers to individuals investing in early cryptocurrency projects, the opportunities are 10 times better than in the traditional financial world. The age of the average investor is coming, and cryptocurrencies are going to be the main avenue for growth.