Good morning timesheet readers. Fortune Crypto Editor Jeff Roberts is talking to you. In recent weeks, there has been an interesting story about the relationship between venture capital and cryptocurrency. The discussion around this topic mostly revolves around VC firms getting burned by reckless crypto bets (most notably Sequoia spent $200 million on FTX), but there is another side to the story.
I mean venture capital crypto companies. This topic has been in the news this month after a surprising change in FTX. It turned out that Sam Bankman-Fried, a known con artist, was bilking his clients' money left and right, including large loans to FTX executives and the promised $55. My friend's million dollar contract with Tom Brady. to tear off the kush.
The money in question comes from FTX's $500 million bid for artificial intelligence startup Anthropic. The startup, founded by disgruntled ChatGPT employees, raised $300 million from Google to make the tech giant a "cloud provider of choice," then turned around and raised $4 billion from Amazon Web Services. Anthropic is rumored to be raising another $2 billion at a $30 billion valuation. Ironically, this can lead to good profits and ease the suffering of irritated FTX customers and investors.
Anthropic is an exception, but FTX is not the only cryptocurrency company with a venture capital portfolio. There's also Celsius, another bankrupt cryptocurrency company whose founder liked to take customers' money and got into a car accident last year. The beleaguered company was acquired by Fahrenheit, a group led by Silicon Valley veteran Michael Arrington, in part for its venture capital portfolio.
Its portfolio consists of startups focused on innovation in "DeFi infrastructure, trading tools, treasury management and bitcoin mining." We are excited to help these companies grow and realize their potential,” said Arrington. Fahrenheit doesn't have any future unicorns in its portfolio yet, but some diamonds could be on the horizon.
Meanwhile, when it comes to crypto companies making venture capital bets, the biggest is Coinbase Ventures, which has stakes in hundreds of startups. In March 2022, Oppenheimer said the wallet had "hidden value" and estimated its value at more than $6 billion. That valuation was 18 months ago, and after the recent cryptocurrency carnage, it's unlikely the valuation will continue, but don't be surprised if there are thoroughbreds in the stable.
If the cryptocurrency can turn around and start another rally, it's only a matter of time before things get really interesting, if the previous period is any indication. If that happens, the industry's current reputation as a black hole for venture capital could quickly change, with the biggest crypto companies talking about exiting portfolio companies rather than seeking funding.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts:
Joe Abrams edited the advice section of today's newsletter.
This story was originally published on Fortune.com