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Matthias Knab, Opalesque for New Managers:

A Masterclass with Europe's largest Blockchain Venture allocator reveals how to navigate the most important decision in Digital Asset allocation.

The Market Context: An Unprecedented Capital Surge

The numbers are staggering. The opportunity is real. But the gap between success and failure has never been wider.

This isn't just a recovery. It's a structural shift.

The 2025 figure has already surpassed the previous record set in 2021 by more than 50%. That year, which marked the height of the crypto boom, saw $28.1 billion in VC funding - nearly twice what had been invested between 2017 and 2020 combined. Yet 2025 has blown past that benchmark with room to spare.

The momentum has been building throughout the year. First quarter funding reached $7.2 billion, up 111% year-over-year. The second quarter brought $6.3 billion, a 70% increase. But it was the third and fourth quarters that truly redefined expectations. Q3 delivered $14.4 billion - a 657% surge compared to the same period in 2024 and the highest quarterly figure on record. The fourth quarter continued the trend with $16.5 billion, representing a 211% increase over Q4 2024.

More Than Just Crypto: A Comparative Perspective

The scale of this capital influx becomes even more remarkable when compared to other sectors. With $42.2 billion in year-to-date funding (slightly different from the $43.7B total cited, reflecting measurement timing), the crypto market nearly matches cybersecurity, which has attracted $45 billion in total investments. More tellingly, blockchain venture funding has outpaced robotics by almost three times - the latter saw only $18.2 billion in VC funding.

While still trailing heavyweight sectors, crypto's position is increasingly substantial. The market has raised more than one-third of the AI industry's $118.2 billion funding total, nearly 70% of the IT sector's $60.2 billion, and one-fifth of all venture investments in fintech, which amounted to $163.7 billion.

What's Driving the Surge?

This isn't random capital chasing hype. Several structural factors have converged:

Renewed investor confidence: After the 2023-2024 slowdown, institutional players have returned with conviction, viewing this as an opportunity to get in early on the next wave of blockchain innovation.

Regulatory clarity: Clearer regulatory frameworks in key jurisdictions have reduced uncertainty, making institutional allocation decisions more straightforward.

Real-world asset tokenization: The rapid growth of RWA tokenization has provided concrete use cases that extend beyond speculative trading.

Infrastructure maturation: Next-generation infrastructure, AI-integrated crypto tools, and Layer 2 solutions represent genuine technological advancement, not just narrative-driven speculation.

Strong crypto performance: Market performance throughout most of 2025 has validated the thesis and attracted fresh capital.

The Performance Story: Why BCVC Funds Are Outperforming

Capital flowing into the sector is one thing. Returns are another. And here, the data is equally compelling.

According to recent research from Cambridge Associates - one of the most respected names in institutional investment consulting - blockchain and crypto venture capital funds (BCVC) have delivered higher 5-year and 10-year net IRRs than traditional VC.

These results are remarkable for several reasons. First, they span multiple "crypto winters" - periods of severe market decline that many predicted would destroy the asset class. Second, they demonstrate consistent outperformance across different time horizons. Third, they show that the opportunity isn't just theoretical - actual managers have generated these returns for actual investors.

The Vintage Year Advantage

Perhaps most counterintuitively, some of the strongest returns have come from funds launched during downturns. The 2018 vintage BCVC funds - launched in the depths of the post-2017 crypto winter - have delivered 39% IRR since inception. This challenges the conventional wisdom about market timing and highlights the importance of having capital deployed when opportunities are most abundant.

The Exit Dynamic Has Changed

Traditional venture capital operates on a well-understood timeline: invest, build, IPO or strategic sale, return capital. The cycle typically takes 7-10 years, sometimes longer.

Blockchain venture has introduced a parallel exit mechanism: token generation events (TGEs), sometimes referred to as token launches or initial coin offerings (ICOs). These liquidity events can occur years earlier than traditional IPO timelines, providing faster capital return and enabling portfolio rebalancing.

However, this creates its own complexity. Portfolio volatility can actually rise after year 3-5 as liquid token holdings begin to dominate portfolio composition. What appears as performance on paper can become actual gains or losses as tokens trade on public markets. This dynamic makes due diligence not just about initial investment decisions but about ongoing portfolio management and risk monitoring.

The Critical Challenge: Dispersion and Manager Selection

Here's where the opportunity becomes complicated - and where most allocators fail.

Despite the strong aggregate performance of BCVC funds, dispersion is extraordinarily wide. The gap between top-quartile and bottom-quartile managers isn't just significant - it's existential.

In blockchain venture capital, manager selection matters more than in almost any other asset class.

With more than 200 funds now competing for institutional capital, only a handful are delivering sustainable, risk-adjusted returns. The difference isn't subtle. Top-quartile managers are massively outperforming weaker peers, while bottom-tier funds are destroying capital.

This creates a paradox: the asset class as a whole is outperforming, but most individual allocators will underperform if they fail to identify the right managers.

Why Is Dispersion So Wide?

Several factors contribute to the extreme performance dispersion in blockchain VC:

Technical expertise requirements: Understanding blockchain infrastructure, protocol design, tokenomics, and smart contract architecture requires specialized knowledge. Many generalist VCs entering the space lack this expertise.

Network effects: The best blockchain VCs have spent years building relationships with founding teams, technical talent, and ecosystem participants. These networks are difficult to replicate quickly.

Portfolio construction complexity: Balancing liquid and illiquid holdings, managing token lockups, navigating regulatory considerations across jurisdictions, and sizing positions appropriately requires sophisticated operational capabilities.

Market timing and narrative risk: Blockchain technology evolves in waves, with capital rotating between different themes (DeFi, NFTs, Layer 2s, AI x Crypto, RWAs). Managers who chase narratives rather than fundamental innovation often generate poor returns.

Governance and operational standards: Many crypto-native funds lack institutional-grade governance, risk management, and operational infrastructure. This becomes critical during periods of stress.

Tourist trap: The sector has attracted numerous "tourists" - traditional VCs making opportunistic allocations without genuine commitment or expertise. These managers typically underperform and exit the space after the first downturn.

The Institutional Response: Process Over Prediction

The solution isn't to avoid the asset class - the returns and structural growth opportunity are too significant. The solution is to apply institutional discipline to manager selection.

This is exactly what Theta Capital Management has been doing for the past six years.

As Europe's largest blockchain venture allocator, Theta Capital has constructed one of the broadest institutional portfolios in the sector through its Theta Blockchain Ventures strategy. Since 2018, the firm has executed dozens of allocations, developing a research-driven, repeatable process to identify and build exposure to the most capable managers globally.

Their approach combines qualitative insight, quantitative analysis, and disciplined portfolio design to translate innovation into investable exposure. More importantly, they've done this across multiple market cycles - experiencing both the euphoria of 2021 and the despair of 2022-2023.

The result? A framework that prioritizes process over prediction, governance over hype, and sustainable returns over narrative-chasing.

The Masterclass: Opening Up the Playbook

On Wednesday, December 10th at 11:00 AM ET (4:00 PM GMT, 5:00 PM CET, 6:00 PM Riyadh, 7:00 PM Dubai, 8:30 PM Delhi), Theta Capital is opening up their entire manager selection process in a 60-minute Opalesque Investor Workshop.

This isn't a blockchain hype session. It's a practical masterclass on manager selection discipline in a high-stakes, rapidly evolving market.

What You'll Learn

From Universe to Portfolio: Filtering 200+ Managers

As institutional capital enters digital assets, the challenge isn't finding managers - it's finding the right ones. The session will detail how Theta tracks, filters, and evaluates more than 200 blockchain venture managers globally, creating a manageable shortlist from a overwhelming universe.

Qualitative Assessment: Characteristics of Enduring Managers

Theory is cheap. Track records tell the truth. The masterclass will explore the common characteristics Theta has identified in resilient, enduring venture managers - the qualities that separate those who survive and thrive across cycles from those who don't.

Institutional Oversight: Applying Governance to a Frontier Asset Class

How do you apply institutional-grade governance, risk management, and operational standards to managers operating in a frontier asset class? Theta will share their framework for ensuring accountability without stifling innovation.

Portfolio Construction: Balancing Diversification and Conviction

Building a BCVC portfolio isn't just about finding good managers - it's about balancing diversification and conviction across strategies, stages, and ecosystems. The session will detail Theta's approach to position sizing, pacing, and portfolio design.

Evolution of the Landscape: Six Years of Lessons

What do dozens of allocations across multiple cycles reveal about how blockchain venture is maturing? Theta will share their observations on how the market has evolved and where they see it heading.

The Framework You'll Take Away

Attendees will leave with actionable tools and insights:

• A repeatable framework for evaluating blockchain venture managers that can be applied systematically across opportunities
• The top 5 red flags Theta has learned to spot - the warning signs that have consistently preceded underperformance or operational failures
• How to apply institutional governance without stifling innovation - striking the balance between oversight and allowing managers to operate effectively
• Portfolio construction principles for an emerging, high-dispersion asset class - specific guidance on sizing, diversification, and risk management

Who's Speaking

Ruud Smets, Partner & Chief Investment Officer, Theta Capital Management B.V.

Ruud will discuss Theta's investment philosophy and how structural shifts in blockchain technology inform portfolio design. His perspective spans the entire evolution of institutional blockchain investing, providing context on how thinking has evolved and where the opportunity set is heading.

Leopoldo Ochoa, Investment Associate, Theta Capital Management B.V.

Leopoldo will walk through Theta's manager research and due diligence process in detail, sharing the specific questions, frameworks, and analytical tools used to evaluate managers. This is the operational heart of the masterclass - the "how-to" that attendees can apply immediately.

Who Should Attend?

This masterclass is designed for professional investors who are either:

• Evaluating blockchain venture for the first time: Family offices exploring digital asset allocations, institutional investors building blockchain exposure, or investment committees seeking due diligence frameworks
• Refining existing approaches: Fund-of-funds managers already active in the space who want to benchmark their process against an established institutional allocator
• Seeking operational insights: Investors who understand the opportunity but struggle with the "how" - how to source managers, how to conduct due diligence in this space, how to construct portfolios appropriately

The content assumes a sophisticated audience. This isn't Blockchain 101. It's an advanced workshop on manager selection in a complex, evolving asset class.

Why This Matters Now

Blockchain venture is entering an institutional phase. The 2025 capital surge isn't just speculative froth - it reflects genuine conviction from professional allocators who have done the work.

But as the Cambridge Associates data makes clear, aggregate performance masks enormous dispersion. The asset class as a whole may be outperforming, but your individual allocation will succeed or fail based on manager selection.

With $43.7 billion flowing into the space this year alone, the pressure to allocate is intensifying. Family offices are fielding pitches from dozens of blockchain VCs. Institutional investors are being asked by their committees to develop a perspective on digital assets. Fund-of-funds managers are trying to distinguish signal from noise in an increasingly crowded market.

The risk isn't missing the opportunity - it's getting it wrong.

Deploying capital into bottom-quartile managers doesn't just result in underperformance. It often results in permanent capital impairment. It damages credibility internally. It makes it harder to justify future allocations to the space, even as the structural opportunity continues to grow.

Conversely, getting manager selection right in this environment can be transformational. The returns are real. The growth trajectory is real. The institutional adoption is real. But capturing this opportunity requires process, discipline, and expertise.

The Bottom Line: Hype Is Easy, Real Success Is Rare

In blockchain venture, the gap between top-quartile and bottom-quartile managers isn't just wide - it's existential.

With 200+ funds competing for capital and only a handful delivering sustainable returns, manager selection isn't just important. It's everything.

After six years and dozens of allocations, Theta Capital has learned what separates the fleeting from the enduring. This isn't about chasing narratives. It's about process, governance, rigorous research, and institutional discipline applied to the frontier of innovation.

The opportunity is real. The market data confirms it. The performance data validates it. But translating that macro reality into portfolio success requires expertise, frameworks, and discipline.

This masterclass provides all three.