Bain Capital on NFTs

The title of this article and the part that's actually interesting are two very different things.

Lydia Hylton, a new partner at Bain Capital Ventures who just made the move from Redpoint, was asked about how to pick winners in a sea of new NFT projects. She's part of the new "Bain Capital Crypto" team tasked with deploying $560M into crypto investments so she's a great person to ask. Her response (which mirrors my own not very sophisticated strategy) was - to paraphrase: Do people on Twitter that know what they're talking about think it's cool? Is the Discord lively? If yes, it's probably legit.

This mirrors my personal strategy, so no surprises there.

BUT... it was the non-NFT focused quote she gave at the end that caught my eye:

“The amount of dry power that’s just undeployed that’s going to go into these crypto projects is extreme,” she said. “The world is going to get a lot of crypto whether they’re ready for it or not.”

I think this is spot on and it's going to be a very interesting 2022 because of it. As public markets turn and smaller investors hold their wallets a little tighter, an army of big funds are itching to deploy capital. This is true of funds in general, but in crypto I think the word "extreme" is appropriate. Will there be enough legitimate projects to put that money to work? Will valuations be propped up? Will we get way more crypto than we know what to do with?

Raising a big fund is fun and all, but it's going to be interesting to see how these different dynamics converge in the coming year as they're deployed.

Click here to check out the full article from Mahira Dayal at The Information.