Cryptocurrencies, blockchain, NFT and new trends

Fred Wilson’s USV to ‘double down’ on web3 investing amid regulatory pressure

Deals • May 24, 2023, 8:54AM EDT

Quick Take

  • Fred Wilson’s venture capital firm USV to ‘double down’ on web3 investing amid regulatory pressure in the U.S.
  • “When you see that fear in their eyes, invest in the cause of that fear,” Wilson said.

Stay updated on Pro Crypto Ecosystems news by locking ACS tokens with The Block.

Connect/Create Wallet You can unlock at any time.*
No wallet? No problem. You can set one up for free. We recommend Torus for first-time users.
*a 2% locking fee will be added at the time of locking. Learn more about Access Protocol

Union Square Ventures, an early investor in Coinbase, wants to in fact “double down” on web3 investing rather than retreat in the face of increasing regulatory pressure.

“When they want to shut it down, I say double down,” Fred Wilson, partner at USV, told the fund’s limited partners earlier this week on a quarterly call. “The most powerful technologies send waves of fear through the establishment. When you see that fear in their eyes, invest in the cause of that fear.”

U.S. regulators have increasingly cracked down on the crypto industry due to recent high-profile collapses, including the FTX exchange and the crypto lender Celsius. In March, for instance, Coinbase received a warning from the U.S. Securities and Exchange Commission about a potential enforcement action. The increased scrutiny of the crypto industry in the U.S. has prompted companies to explore international financial hubs, including Dubai, Singapore and Hong Kong.

New York-based USV remains committed to keep backing web3 startups. The storied venture capital firm invested in Coinbase in 2013 as its first crypto bet. Over the years, the firm has invested in over 25 web3 projects, including Uniswap, Polygon and Helium, according to The Block Pro’s Deals Dashboard.

While USV remains determined, Wilson said earlier this year that web3 investors would require “a very strong stomach and a very long time horizon” even as valuations are compelling during a bearish market. Despite the last year being challenging, USV raised $625 million across two new funds to invest in both web2 and web3.