2024 Q1 Market Review

On the macro side, the global economy faces headwinds, with the UK and Germany entering recession and global GDP growth expected to slow, as interest rates are anticipated to stay above 4%. This contrasts with a robust consumer discretionary sector, showing low unemployment rates and increasing labor participation, despite increasing personal borrowing. In capital markets, cryptocurrencies and AI stand out for their exceptional performance, with institutional crypto inflows reaching $14 billion YTD and Bitcoin ETFs amassing $60 billion in AUM, despite fintech venture capital investments declining by 16%.

Web3 fundamentals exhibit strong growth, with over 1.3 billion addresses across major computational chains and daily active users escalating from 4.5 million to 7.5 million. The DeFi sector shows stablecoins surpassing $150 billion and Ethena's synthetic dollar offerings yielding between 30-60%. NFT volumes are still low, despite Bitcoin Ordinals and Solana's meme coins, and the market remains 60% below its 2021 peak volumes of over $1 billion.

On the AI side, China's dominance in academic research is notable, with a significant majority of AI talent originating there, though many relocate to the US for employment. Venture funding in AI has largely concentrated on model training, with NVIDIA maintaining its leadership in hardware. Corporate AI venture has become a powerful force. Further, public decentralized AI entities are outshining both Western and Eastern public companies, signaling where value creation can happen, consistent with our thesis.