Every crypto cloud has a golden lining

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While most investors in our sector are nursing significant losses after the recent change in sentiment towards tech and crypto, there are still some winners and bargain hunters out there.

Anyone taking a long-term view is able to invest in some potentially undervalued companies right now, and venture capital firm Andreessen Horowitz is showing its faith in digital assets with the launch of a $4.5bn cryptocurrency fund, reports Hannah Murphy.

It said on Wednesday that the largest crypto fund to date would allocate about $1.5bn to seed investments while the remaining $3bn would be earmarked for venture investments. The new fund is the fourth from Andreessen to focus on crypto, taking its total investment in the space to more than $7.6bn.

Despite the so-called “crypto winter”, Chris Dixon, managing partner and founder of Andreessen’s crypto arm, said the group believed the space was reaching a new “golden era” in which “new talent, viable infrastructure, and community knowledge” would spur rapid innovation. “We believe blockchains will power the next major computing cycle,” he said. “That’s why we’ve decided to go big.”

Meanwhile, Lex has been looking at Korean crypto exchanges and says such exchanges, which make fees on massive crypto trading volumes regardless of the direction of the market, can end up being the winners when tokens like the stablecoin terraUSD collapse.

Elsewhere, short sellers are reaping a bumper harvest in the tech sector sell-off, it adds. S3 Partners, a technology and data analytics firm, estimates that $1 in every $5 shorted in US markets in the last quarter was in information technology stocks. In the year to date, short positions in the IT sector have generated a 34 per cent profit, S3 calculates. Short sellers took an implied gain of $535mn on Tuesday’s slump in Snap shares.

Finally, quants, the hedge funds that rely on tech — using powerful computers to run their portfolios — are making huge profits in this year’s market turmoil. Laurence Fletcher reports the trend-following quantitative funds, which use mathematical models to try to predict market movements, have profited mainly from bets against government bonds, which have been shaken by expectations that the Federal Reserve will keep raising interest rates aggressively to fight high inflation.

“Now is one of those 2008 moments where everyone [in trend-following] is doing well again. The trends are clearer,” said Leda Braga, founder of Systematica Investments and former head of systematic trading at BlueCrest.

The Internet of (Five) Things

1. UK government to review Newport Wafer deal
The government has called in the Chinese acquisition of Britain’s largest chipmaking plant. Kwasi Kwarteng, the business secretary, said the takeover last year of Newport Wafer Fab by Nexperia — a Dutch subsidiary of Chinese company Wingtech — would face a review under the new National Security and Investment (NSI) act.

2. State fund enters Toshiba fray
A $30bn fund backed by the Japanese government is weighing a takeover of Toshiba, entering a bidding battle that has drawn interest from the world’s largest private equity funds. The interest from Japan Investment Corporation would be the first by a state-backed fund and comes as the conglomerate nears a deadline of May 30 for the first round of bidding.

3. Stellantis and Samsung plan US battery plant
Stellantis and Samsung will build a $2.5bn battery plant in Indiana, as the parent group of Chrysler and Fiat accelerates its electric vehicles shift in the US after lagging behind its peers. The facility is set to open in 2025 and would be Samsung’s first battery manufacturing site in the US.

4. Prologue seeks to avoid tech epilogue
Prologue, a company backed by some of Silicon Valley’s largest venture capital firms, wants to build a big business out of small stakes in dozens of start-ups. First, it needs to navigate a tech crash, writes Miles Kruppa. Andreessen Horowitz and Sequoia Capital have invested $23mn in Prologue, making it one of most well-funded new challengers to famed start-up accelerator Y Combinator.

5. Is bitcoin El Salvador’s saviour?
Gilliant Tett has been talking about El Salvador’s adoption of bitcoin as legal tender with Suecy Callejas, a former ballerina and lawyer who is now both culture minister and acting head of the national Congress. The politician says citizens are comfortable with bitcoin’s volatility, it can help reduce charges on remittances and promotes financial inclusion.

Tech tools — Microsoft’s Power Pages

Microsoft has announced an easier way to build websites for businesses, at its annual Build developer conference this week. Following the no code/low code trend, Power Pages will be available as a standalone program and “empowers anyone, regardless of their technical background, with an effective platform to create data-powered, modern, and secure websites”. Apps are also covered by the Power platform. XDA reports the Power Apps Express Design feature allows you to feed any design input — such as a PDF file or even a hand-drawn design — into Power Apps and see it come to life as a proper app with working controls and data storage.

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Source: Financial Times