The cryptocurrency market is experiencing a major crash in 2022 as the value of Bitcoin, Etherium and other crypto assets plummet. But despite turbulent times for blockchain businesses, investors and entrepreneurs in Chicago are gathering to pitch their visions for the future of the internet.
Web3 Investor Day kicked off Thursday. Organized by Chicago blockchain VC firm Decasonic, a $49 million fund that invests in startups working on the metaverse, NFTs and other crypto projects, the event is bringing together hundreds of investors, founders and other "crypto curious" folks looking to learn more about Chicago's blockchain community, Decasonic founder Paul Hsu said.
The sold-out summit, which includes 300 participants and is dubbed the Midwest's largest Web3-focused event, features a day of panels and networking with some top local crypto leaders. Speakers include Brett Harrison, the president of FTX US, a large crypto trading firm that made Chicago its American headquarters. Others include Rumi Morales, a Chicago crypto investor and head of venture and growth investing at Digital Currency Group; Samir Mayekar, the deputy mayor for the city of Chicago; Ben Weiss, the CEO of fast-growing Bitcoin ATM operator CoinFlip; and Sam Yagan, the founder of Corazon Capital.
The goal is to bring the crypto community together over panel topics involving NFTs, leaders in Web3 and the state of crypto in Chicago. But it comes amid a bear market for blockchain businesses that have been hit hard by the broader tech crash of 2022. As the industry sees valuations plummet, and scammers and other bad actors are revealed, Hsu believes Chicago has positioned itself as a place for authentic innovation in the crypto space, with "a lot of substance being built here in Chicago."
"The theme for the conference is about real leaders, real places and real adoption," he said. "The bear market is certainly removing the tourist VCs from the space ... and the mediocre, fast-money entrepreneurs. This is really a conference about how Chicago can bring people together, and bring leaders together to build."
And even amid a downturn, the volume of investable blockchain businesses remains high. Hsu said his fund has been busier than ever with deal flow, and crypto investing across the country has remained steady this year. VC investments in blockchain companies has reached $18.3 billion so far in 2022, which is almost triple what was invested in 2020 and on pace to break 2021’s record.
Hsu said he's advising portfolio companies to plan for a two-year bear market, with the goal of lowering burn rates and being selective with hiring.
"Survive and thrive," he said. "Create those business plans that are resilient in the downturn. Stay frugal."
Chicago, combined with its history as a trading town and its emerging tech scene, has become a growing epicenter for blockchain companies. Along with FTX, fellow crypto trading firm Gemini has set up shop in Chicago. The New York-based cryptocurrency exchange, led by Tyler and Cameron Winklevoss, leased space this year at 1 S. Wacker Dr. in the Loop. Chicago is also home to Jump Capital, a VC firm from Jump Trading, which last year announced a new blockchain investing division called Jump Crypto. And Sfermion, led by Chicagoan Andrew Steinwold, raised a $100 million fund that's focused on NFTs and the metaverse.
