Major Fund: 99% of Blockchain Investors are Interested in Profits, Could Ruin Market

Joyce Kim, co-founder of $3.5 billion blockchain network Stellar and cryptocurrency hedge fund managing partner at SparkChain Capital, said in an interview with Chosun that 99% of blockchain sector of investors are interested in short-term profits rather than the technology.

Currently the vast majority of the cryptocurrency market focus on generating short-term profits off of initial coin offering projects and upcoming blockchain platforms.

Five years ago, Kim explained that the cryptocurrency market had significantly more investors that were simply interested in the technology and the future of the blockchain sector.

"Just about five years, the blockchain industry had more people interested in the technology rather than profits. However, now, 99 percent of the investors that are involved in the blockchain sector are in it for the money. Capital is important, but this profit-first structure in the market could ruin the development of the blockchain."

The blockchain sector is in need of investors and partner companies that understand the complexity and difficulty in developing decentralized applications, and who are not pushing for short-term results and returns.

In the mid to long-term, Kim stated that the company will focus on funding blockchain startups and projects that are working on applications that can support supply chains, database, and platforms in the agriculture industry.

"For instance, there exists a coffee bean extracting startup in Congo and it recently eliminated intermediaries through the usage of the blockchain. It allowed farmers that produce coffee beans to receive a larger share of the revenue. One family in Congo can afford to send their daughter to school if their revenue increases by 10 percent, which is possible by integrating blockchain. Everyone wants to earn more money but using the blockchain to increase the profit margins of startups is more effective and impactful."

The focus of every blockchain fund varies depending on its vision.

Hacked, the biggest cryptocurrency fund in South Korea has consistently funded high-performance blockchain networks rather than blockchain startups working in more conventional areas like supply chain.

The diverse vision of major funds in the cryptocurrency market will allow a wide range of startups to gain sufficient capital and partners to commercialize the blockchain with success.