Unveiling Vertex Capital: Innovative Philosophy and Cutting-edge Practices in Web3 Investment
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/Vertex Capital/ – Since the approval of the BTC ETF in early 2024, Bitcoin’s price has surged, hitting a record high of $70,000 in March, marking the beginning of a new bull market. This historic event, fueled by global asset managers such as BlackRock and Fidelity Investments, not only attracted institutional investors to cryptocurrency but also showcased the growing importance of this asset class.
BlackRock and Fidelity Investments manage assets of over $8.7 trillion and $4.3 trillion, respectively, and their participation has led to a massive influx of capital into the Bitcoin market. In the month following the approval of the BTC ETF, more than $9.7 billion flowed into the market, with total inflows expected to reach $14.4 billion by the end of the year, and $27 billion and $39 billion in the next two years.
Financial heavyweights like former Morgan Stanley CEO John Mack and J.P. Morgan CEO Jamie Dimon have also shared positive views. John Mack said, “Bitcoin isn’t going away,” and despite Jamie Dimon’s skepticism about Bitcoin, J.P. Morgan became an authorized participant in BlackRock’s Bitcoin ETF. Additionally, Ark Invest’s founder Cathie Wood has expressed her confidence in Bitcoin and blockchain, believing these technologies will revolutionize global finance.
Meanwhile, traditional financial markets face significant challenges. According to Deloitte’s 2024 Global Banking Outlook, global economic growth is forecasted at only 3%, with developed economies like the U.S., Eurozone, Japan, and the UK growing at just 1.4%. Geopolitical tensions and supply chain disruptions have added uncertainty to financial markets.
Rising global interest rates are also putting pressure on the banking industry. JP Morgan predicts the U.S. Federal Reserve will start lowering interest rates in Q3 2024, though they will remain relatively high. Higher rates have increased financing costs, weighing heavily on companies with lower credit ratings, and the U.S. corporate default rate is expected to rise to 5% in 2024.
Amidst this environment, traditional investment institutions and high-quality Web2 projects are increasingly exploring new opportunities in Web3. The emerging Web3 narrative emphasizes the convergence of the virtual and real worlds, ensuring that digital assets have solid real-world value. Vertex Capital, a new entrant in this space, is actively adjusting its strategy to strengthen the Web2-Web3 link.
Investment Strategy: Forward-thinking and Precision Execution
Compared to traditional Web2 funds, Web3 funds have the following advantages:
Shorter investment cycles: Most Web3 projects can exit within 1-2 years, while traditional funds take 7-10 years or longer.
Smooth exit channels: Web3 markets are more flexible, with lower barriers for token issuance. Success in this space depends on a team’s market insight and operational experience, while investors need deep industry knowledge to identify high-value projects.
Vertex Capital focuses on key industry trends and future developments, using its research team to forecast trends 6-12 months in advance and take early positions to seize market opportunities.
To maximize capital efficiency, Vertex Capital combines primary and secondary market strategies. During bull markets, secondary market trading volume rises, so unused capital is deployed to generate returns. In the primary market, Vertex Capital uses a targeted incubation strategy, selecting and supporting early-stage projects to prepare them for token issuance, benefiting from the bull market’s amplification effects.
Vertex Capital’s Approach to Web2-Web3 Integration
With traditional IPO channels closing, many Web2 projects are looking to Web3 for listing opportunities. These transitioning Web2 projects, already vetted by traditional institutions, have mature business models, experienced teams, and real-world revenue, making them more competitive in the Web3 space. Vertex Capital leverages its extensive experience to support these transitions and help projects succeed.
Founder Ander Tsui’s Investment Philosophy
Vertex Capital’s founder, Ander Tsui, is a seasoned investor with over a decade of experience in the crypto industry. He also co-chairs the Hong Kong Blockchain Association and founded the renowned EDGE Summit. Under his leadership, Vertex Capital has built a top-tier research team capable of identifying high-potential projects early.
Ander is also a visionary in merging AI and Web3. He believes that while AI represents productivity and Web3 signifies production relationships, their synergy can drive innovation.
Primary Market Strategy: Resource Integration and Targeted Incubation
Vertex Capital’s core strength lies in integrating resources to accelerate the growth of Web3 projects. With years of experience from its TN Labs in Web2, Vertex has built strong relationships with creators, brands, and supply chains, which benefit both its portfolio companies and traditional Web3 projects.
Key resources include:
Leading Web3 research capabilities for identifying market trends.
Partnerships with top KOLs to enhance project visibility.
Strong connections with blue-chip communities for co-branding.
Strategic collaborations with top-tier exchanges, ensuring optimal conditions for token issuance.
Secondary Market Strategy: Flexible and Stable Returns
Vertex Capital employs a Commodity Trading Advisor (CTA) strategy, combined with arbitrage to optimize returns. Its multi-factor system, including momentum, volatility, and order book analysis, ensures steady profits in volatile markets.
The team also uses a Fund of Funds (FOF) approach, diversifying strategies to enhance risk-adjusted returns, achieving a Sharpe ratio of 2.4.
Featured Portfolio Projects
Vertex Capital focuses on four key sectors, investing in top-tier projects that deliver high returns. Past investments include:
Stratos: Decentralized data grid project with a 100x ROI.
Gnosis Chain: Ethereum sidechain with a 20x ROI.
Izumi: Zksync-based swap project with a 10x ROI.
These successes reflect Vertex’s ability to identify and support high-potential projects through its investment expertise and resource integration.
Join Token Hunter for Rewards
On October 23, Vertex Capital will launch the Token Hunter game, designed to boost exposure for its portfolio projects through a fun MiniApp game. Players can complete tasks and spin a lucky wheel for rewards while engaging with Vertex Capital’s community.
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