Original Title: In Market Crash, What Should You Buy? Crypto VCs Are Making These Bets

Original author: Steven Ehrlich, Unchained

Original text compiled by: Yuliya, PANews

The global financial markets have recently experienced severe turbulence, and the cryptocurrency sector has not been spared either. However, as the investment community often says, market reversals often create rare buying opportunities for visionary investors. In this turbulent environment, understanding the layout strategies of professional investors becomes particularly important.

Following President Trump’s announcement of large-scale and indiscriminate global sanctions last Wednesday, cryptocurrencies continue to decline along with the overall market. As of the time of writing, Bitcoin has dropped 5.86% since then, although it has recovered somewhat after first falling below $75,000 (the first time since the November 5 election). Other large-cap cryptocurrencies like ETH, Solana, and XRP have also performed poorly during this period, trailing behind the market leader.

In such a market environment, market panic sentiment has obviously intensified. The Cboe VIX index, which measures expected stock market volatility, has reached 60 for the first time since the outbreak of the COVID-19 pandemic, while the Deribit Bitcoin Volatility Index (DVOL), which is the closest alternative to VIX in the cryptocurrency market, has risen by nearly 30% in the past week.

In such a situation, it is natural for investors to seek safe haven – or rather buy US Treasuries. However, there is a common adage in the investment world: “Others are greedy when they are fearful, and others are fearful when they are greedy.” This means that now is the time to buy blue-chip assets at a discounted price. To get a sense of how professional money is navigating the crypto market during this volatile time, two major venture capitalists, who requested anonymity, shared strategic insights from their respective companies and provided key information on which categories and sectors are likely to perform best in the coming weeks and months.

Store of Value: Bitcoin and Ethereum

Although it is not surprising, both interviewees believe that Bitcoin remains the top choice. Recently, gold has been hitting new highs and is widely regarded as a symbol of safe-haven assets. Meanwhile, Bitcoin is increasingly demonstrating its attributes as a “digital store of value.” Despite recent fluctuations in trends, the comparative market capitalization chart shows that there is still significant growth potential between Bitcoin and gold.

The current market value of gold is approximately $20.4 trillion, while Bitcoin’s market value is only $1.64 trillion. An investor pointed out: “In order to reach a 1:1 market value ratio with gold, Bitcoin needs to rise at least 12 to 15 times. In the current environment, this is the easiest to understand and the most reliable opportunity.”

Ethereum is also considered an asset worth paying attention to, although it has significantly lagged behind Bitcoin in price performance in recent years, and its ratio to Bitcoin is currently at its lowest point since the early days of the pandemic.

A respondent mentioned that after Ethereum transitioned from Proof of Work (PoW) to Proof of Stake (PoS) in 2022, its monetary policy became deflationary, allowing it to some extent to take on Bitcoin’s “store of value” narrative. Despite recent poor network usage and a rebound in inflation, from a valuation perspective, the current price is at a historical low.

Another investor stated: “Ethereum is currently so low, it is indeed a good buying opportunity.”

Solana and DeFi Opportunities

Decentralized Finance (DeFi) tokens have generally faced significant setbacks this year, with native tokens of trading platforms and lending protocols such as Uniswap, Aave, Curve, and Compound dropping nearly 50% since the beginning of the year. However, both investors believe that this sector is likely to rebound strongly against the backdrop of the ongoing tightening macro environment.

One person pointed out that during periods when stablecoin yields are low, DeFi may instead see a return of funds. Because in the on-chain lending portfolio cycle operations, there are still ways to achieve relatively high yields. “This is very similar to the situation in 2021,” he added.

Two projects worth noting are Raydium and Hyperliquid. The former is a traditional automated market-making trading platform built on Solana, similar to Uniswap; the latter focuses on perpetual contracts, which are a cash-settled type of derivative.

If you don’t want to choose a single token, you can also pay attention to Solana itself. “Solana is somewhat like an index fund for DeFi. There are many very interesting DeFi projects developing on it.”

EigenLayer and Near: The Next Infrastructure Opportunity

Both investors believe that last year’s hot “AI + Blockchain” concept is mostly exaggerated. One bluntly stated, “Basically, it’s all just vaporware.” However, he also pointed out that this situation is not uncommon in early-stage tracks, as was the case with the ICO boom in 2017. “The first wave is usually vaporware, but there will also be a little bit of real substance in there, and those are what will be worth paying attention to in the following years.”

They believe that the next phase of AI narratives is more likely to focus on “AI agents,” such as travel robots that automatically book tickets. The question is, how can we ensure that the funds deposited into such agent programs will not be misappropriated? One way to do this is to have its security guaranteed by the security of Ethereum itself.

However, Ethereum is not suitable for all projects, mainly due to high transaction costs and the need for some applications to run cross-chain. EigenLayer was born in this context, providing a “shared trust layer” for applications, allowing projects to leverage Ethereum’s security without needing to fully deploy on its mainnet.

“Once your application runs on EigenLayer, its funds are secured by Ethereum,” said an investor. He also specifically mentioned that Near may benefit from this trend.

EigenLayer was once one of the most anticipated projects in the market, but its token launched in October last year, right as the bull market was nearing its peak, and subsequently plummeted over 80%. However, if the current narrative holds, this actually means that investors can buy in at a significant discount. One investor added, “EigenLayer’s market capitalization is now less than 1 billion dollars, and this is the time to buy and hold.”

Overall, despite the fact that the cryptocurrency market is still digesting macroeconomic and policy uncertainties in the short term, it is currently a critical time for institutional investors to reallocate assets and position themselves for a new upward cycle. From value storage assets to infrastructure and DeFi platforms, and to emerging AI interaction applications, the direction of capital investment has gradually become apparent.

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