As American cryptocurrency markets remain relatively subdued, investors are turning to Asia for fresh lifeblood.
Case and point, Multicoin Capital just hired Beijing-based investor Mable Jiang, formerly of Nirvana Capital, to spearhead the venture firm’s hunt for new deals in Asia.
The Texas-based Multicoin started publishing research reports and announcements in Mandarin last summer, so Jiang will also help “capitalize on the structurally broken information flow for secondary-market investment,” the company said in a blog post shared with CoinDesk.
“I think we’ll see a wave of really interesting China-native projects and dapps come to market next year,” Jiang said. “We also believe a global presence is one of the best ways to deliver more sophisticated views to people in different markets.”
Multicoin is merely one of many American crypto hedge funds and venture capital firms seeking a foothold in token-hungry markets like China and Korea. For example, Polychain Capital increased its investment in the Chinese token project Nervos, alongside China Merchants Bank International, and sent partners to travel in Asia for a variety of meetings.
“Several firms have asked us for help in sourcing Asia partners and employees,” Dragonfly Capital’s Alexander Pack said in August. “Asia leads the world in crypto users and adoption by a mile – it’s not even close.”
Despite reports of a Chinese regulatory crackdown, which crop up routinely but have yet to quell demand, SimilarWeb indicates more than half of the traffic for the crypto exchange Huobi comes from mainland China in addition to 35 percent of the global traffic to OKEx. As of October, SimilarWeb shows Korea was the fourth greatest source of traffic for the token-centric site Etherscan, behind China and the United States, with the Korean exchange Bithumb listed as the third most popular referral site in the world.
However, Electric Capital co-founder Avichal Garg said he helms one of the few Silicon Valley funds not looking to expand in Asia because it is “such a different universe” that requires significant resources to address sustainably.
“You see a lot of trade volume. A lot of the pushing of boundaries is coming out of Asia, in part because the regulatory climate there is different,” Garg said. “But most [funds] are hiring more junior talent [in Asia], which I think is a mistake. … Dragonfly is potentially doing this the best where they have extremely high caliber people in both geographies.”
Jiang may be in the first half of her career trajectory, but she also said she has a unique opportunity to leverage local knowledge.
“Localization is absolutely a key component in the accuracy and speediness of judgment,” she said. “For a fund to manage a ‘global’ asset, it has to connect the geographic dots and seek to understand the behaviors driving each investment culture.”
In a letter sent to Multicoin’s investors last month, the firm said, "a significant amount of information travels through word of mouth, WeChat groups, and Mandarin-only social media properties." As such, the letter said, Mable’s job will be to close the information gap.
In some ways, this renewed Asia push is a continuation of a trend that started during the 2018 bear market, when BlockTower Capital became one of the first funds to shift strategies by hiring multilingual Goldman Sachs alumni Steve SeungKeun Lee.
On the other hand, Jiang said this isn’t a trend; it’s a new way to look at stateless assets. From her perspective, crypto requires diverse investors with local cultural competence contributing to a mosaic approach.
“Crypto is one of the few assets that is truly ‘global,’” she said. “I think the biggest misconception is the urge to generically stereotype things with a tag of ‘east’ or ‘west.’”
Ada Hui contributed reporting.
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