The global financial markets have recently experienced severe turbulence, and the cryptocurrency sector has not been spared either. However, as the investment community often says, market reversals often create rare buying opportunities for visionary investors. In such a turbulent environment, understanding the layout strategies of professional investors becomes particularly important.

Following President Trump's announcement of large-scale and indiscriminate global sanctions last Wednesday, cryptocurrencies continued to decline along with the overall market. As of the time of writing, Bitcoin has dropped 5.86% since then, although it has recovered somewhat after initially falling below $75,000 (the first time since the November 5 elections). Other large-cap cryptocurrencies such as ETH, Solana, and XRP have also performed poorly during this period, all lagging behind the market leader.

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In such a market environment, the market's panic sentiment has clearly intensified. The Cboe VIX index, which measures expected stock market volatility, has touched 60 for the first time since the outbreak of the COVID-19 pandemic, while the Deribit Bitcoin volatility index (DVOL), the closest alternative to VIX in the cryptocurrency market, has increased by nearly 30% in the past week.

In this case, it is a natural reaction for investors to seek hedging – or in other words, to buy U.S. Treasury bonds. However, there is a common saying in the investment world: "Be greedy when others are fearful, and fearful when others are greedy." This means that now is the opportunity to purchase blue-chip assets at a discount. To understand how professional funds are positioning themselves in the cryptocurrency market during this volatile period, two leading venture capitalists, who requested anonymity, shared insights into their companies' strategies and provided key information on which categories and industries may perform best in the coming weeks and months.

Store of Value: Bitcoin and Ethereum

Although it is not surprising, both interviewees believe that Bitcoin remains the preferred choice. Recently, gold has been reaching new highs and is widely regarded as a symbol of safe-haven assets. Meanwhile, Bitcoin is increasingly demonstrating its attributes as a "digital store of value." Despite recent fluctuations in its price, the comparison charts of market capitalization still show a significant growth potential between Bitcoin and gold.

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The current market value of gold is approximately $20.4 trillion, while the market value of Bitcoin is only $1.64 trillion. An investor pointed out: "To achieve a 1:1 market value ratio with gold, Bitcoin would need to rise at least 12 to 15 times. In the current environment, this is the easiest and most reliable opportunity to understand."

Ethereum is also considered an asset worth paying attention to, although it has significantly lagged behind Bitcoin in price performance in recent years, and its ratio to Bitcoin is currently at its lowest point since the beginning of the pandemic.

A respondent mentioned that after Ethereum transitioned from Proof of Work (PoW) to Proof of Stake (PoS) in 2022, its monetary policy became deflationary, allowing it to some extent to accommodate Bitcoin's "store of value" narrative. Despite a recent decline in network usage and a rise in inflation, from a valuation perspective, the current price is at a historical low.

Another investor stated, "Ethereum is so low right now, it really is a good buying opportunity."

Solana and DeFi opportunities

Decentralized finance (DeFi) tokens have generally suffered heavy losses this year, with native tokens of exchanges and lending protocols such as Uniswap, Aave, Curve, and Compound down nearly 50% year-to-date. However, both investors believe that the sector is poised for a strong rebound against the backdrop of the current tightening macro environment.

One person pointed out that during periods of low stablecoin yields, DeFi may instead see a return of funds. Because in on-chain lending portfolio operations, there are still ways to achieve relatively high yields. "This is very similar to the situation in 2021," he added.

The two projects worth paying special attention to are Raydium and Hyperliquid. The former is a traditional automated market-making trading platform built on Solana, similar to Uniswap; the latter focuses on perpetual contracts and is a cash-settled derivative.

If you are not willing to choose a single token, you can also focus on Solana itself. "Solana is somewhat like an index fund for DeFi. There are many very interesting DeFi projects developing on it."

EigenLayer and Near: Next Round of Infrastructure Opportunities

Both investors believe that the "AI + Blockchain" concept that was popular last year is mostly exaggerated. One bluntly stated, "Basically, it's all air projects." However, he also pointed out that this situation is not uncommon in early-stage tracks, as was the case with the ICO boom in 2017. "The first wave is usually air projects, but there will also be a little bit of real substance, and these are what will be worth paying attention to in the following years."

They believe that the next phase of AI narratives is more likely to focus on "AI agents", such as travel robots that automatically book tickets. The question is, how to ensure that the funds deposited into such agent programs are not misappropriated? One way to achieve this is to have its security guaranteed by the security of Ethereum itself.

However, Ethereum is not suitable for all projects, primarily due to high transaction costs and the need for some applications to operate across chains. EigenLayer was born in this context, providing a "shared trust layer" for applications, allowing projects to leverage Ethereum's security without fully deploying on its mainnet.

"Once your application runs on EigenLayer, its funds are secured by Ethereum," a investor stated. He also specifically mentioned that Near may benefit from this trend.

EigenLayer was once one of the most anticipated projects in the market, but its token was launched in October last year, just as the bull market was nearing its peak, and subsequently, the price plummeted by over 80%. However, if the current narrative holds, it actually means investors can buy in at a significant discount. One investor added, "EigenLayer's market cap is now less than $1 billion, and this is the time to buy and hold."

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Overall, although the crypto market is still digesting macro and policy-level uncertainties in the short term, it is a critical time for institutional investors to reallocate assets and lay out a new round of upward cycle. From value storage assets, to infrastructure and DeFi platforms, to emerging AI interactive applications, the direction of capital betting has gradually emerged.

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