Earlier this week, the crypto market declined sharply before bouncing back, with bitcoin dropping over 15% and ether experiencing its steepest decline since the FTX collapse. This selloff, fueled by broader economic concerns and geopolitical factors, increased market uncertainty. Curious whether these events triggered any significant shifts in crypto funds' strategies, I reached out to leading crypto investors managing liquid and hedge funds to learn about their plans moving ahead.

Interestingly, despite the market recent turbulence, several crypto funds continue to focus on fundamentals, with a strong bullish stance on Solana (SOL) and the DeFi sector. Joe McCann, founder, CEO and CIO of Asymmetric Financial, told me that his firm, managing two liquid funds with 9-figure and 8-figure assets under management (AUM) respectively, remains invested in bitcoin while overweight on Solana. "We have owned exactly zero all year and see absolutely no reason to own it going forward," McCann said. "The relative value of  SOL vs. ETH has just broken out to a new all-time high, validating our thesis that SOL will continue to radically outperform ETH."

At Syncracy Capital, co-founder Ryan Watkins echoed this sentiment, highlighting Solana's undervaluation compared to Ethereum. He told me, "Solana now rivals Ethereum across most meaningful metrics yet trades at 1/5 the valuation." Watkins also expressed optimism about Solana's ecosystem, saying it is similarly "mispriced" as compared to Ethereum's ecosystem, "with a handful of protocols generating $10 million to $50 million in earnings, growing 100% to 1000% year-on-year, trading at S&P 500 multiples — a fraction of their peers on Ethereum."

Watkins also pointed out the DeFi and infrastructure sectors, noting that Syncracy is observing these areas generating 8-9 figures in earnings and growing triple-digit percentages year-on-year. "We are very bullish on these category leading, cash flowing assets," he said. Syncracy manages one liquid fund with an AUM of 9 figures, Watkins added.

Similarly, Multicoin Capital's managing partner Kyle Samani reaffirmed the firm's commitment to Solana, while also expressing increased confidence in decentralized physical and virtual infrastructure network projects (DePINs and DeVINs), alongside stablecoins.

Maven 11's portfolio manager, Ruben van den Eshof, pointed to a global interest rate easing cycle as a catalyst for stablecoins and DeFi growth. He told me that, with more rate cuts expected, the stablecoin market is likely to grow further, significantly benefiting DeFi. Maven 11 is positioning itself accordingly, with allocations to stablecoins like Maker and lower-cap DeFi tokens such as Maple Finance, van den Eshof said.

DeFiance Capital's founder, CEO and CIO Arthur Cheong, shared that the firm's focus has recently shifted towards DeFi, citing its strong product-market fit and attractive valuations. "DeFi is trading at the lowest valuation since 2020 relative to their various metrics/traction we track," Cheong said. On the other hand, DeFiance has reduced its exposure to the crypto-AI sector due to the need for more tangible growth and validation to deserve higher valuations, Cheong added. DeFiance manages one liquid fund with an AUM of "high 8 figures."

Pantera Capital's portfolio manager, Cosmo Jiang, emphasized the firm's continued focus on fundamentals, particularly in blockspace, DeFi, DePINs and AI. Pantera's investments have been in Solana, Toncoin, Hivemapper, Geodnet, Near and Bittensor, Jiang said, reflecting a broad interest in diverse sectors. Pantera manages a combination of active versus passive and open versus closed-end vehicles, with an aggregate AUM of over $1 billion, Jiang said.

Finally, Joey Krug of Founders Fund told me about his increased personal allocations to "blue-chip" DeFi assets, including Uniswap, Fantom and Akash, each with promising mid- to long-term catalysts. While his ETH exposure remains high, Krug has reduced his bitcoin holdings, he said. "This is primarily because I believe altcoins have relatively bottomed out versus bitcoin, presenting a good opportunity to increase exposure," Krug said.