On October 1, the HSC Conference returned to Seoul — home to one of the world's most active digital asset markets — convening investors, fund managers, and asset allocators to examine how capital is moving through digital assets in the current market cycle. Among the sessions was "Investments Today: Where Smart Capital Is Moving," moderated by Victoria Palchik of HSC Asset Group. The panel featured Ciara Sun of C² Ventures, Catrina Wang of Portal Ventures, and Steven McClurg of Canary Capital — investors spanning early-stage venture backing and institutional asset management — who discussed how leading funds are positioning across the asset class, from early-stage bets to high-conviction plays.

Capital Stays Selective as Liquidity Returns

The discussion opened with where capital is actually being deployed. Sun said liquidity has returned compared with last year, though venture investors remain conservative. Larger projects with higher valuations continue to attract backing, while early-stage teams without a launched product or measurable traction struggle to raise. She added that Bitcoin continues to absorb most trading liquidity.

Wang admitted the recent rally surprised her, but said her approach as a first-check investor — the backer who supplies a startup's earliest outside capital — has not changed. McClurg supplied the macro backdrop: high inflation and rising bond yields, he argued, push investors toward crypto, and he expects the next four-year cycle — the market rhythm long tied to Bitcoin's halving events, which occur roughly every four years — to be led by protocols with strong tokenization projects.

A Contrarian View on AI

That same macro lens shaped McClurg's response when the moderator asked why he is not keen on AI as an investment thesis. He said the US data center buildout may outpace the compute the world actually needs, with chips being stockpiled before they can be used. He drew a parallel to Bitcoin mining cycles, where overspending in good times forces selling when prices fall.

Wang and McClurg agreed that AI is ultimately deflationary, with Wang describing it as a process innovation rather than a product innovation. The exchange set up the theme that followed: where enthusiasm runs ahead of revenue, these investors turn cautious.

What Investors Now Underwrite

The panel agreed that fundamentals matter more than narrative. McClurg pointed to last year's collapse of digital asset treasury companies — firms built around holding crypto on their balance sheets — as evidence that adding crypto to a weak company's balance sheet does not make it viable. For protocols, he said, "what you can't fake is onchain revenue." Unlike metrics a team reports in a pitch deck, on-chain fees and usage can be checked in real time on public blockchains.

Sun focused on real user demand, pointing to tokenized equities — shares rendered as blockchain tokens — FX trading, and distributed computing. She cautioned that tokens and equity can capture very different value from the same business, meaning investors must examine how revenue is distributed.

At the earliest stage, Wang said she underwrites founder and sector, and cited early bets on real-world assets before the category was established. Her emphasis on founders has grown over time. After a portfolio company pivoted entirely outside crypto, she realized she would still back the team, and she now weighs the founder far more heavily than before.

Institutional Versus Merely Interesting

If revenue is the filter, the harder question is what makes a project institutionally investable. For Sun, the test is whether users and revenue return once incentives end and the hype fades. Wang drew the line at time horizon: a quick multiple over a few months is a trade, she said, and "more long-term orientation" is what separates institutional investors from the merely interested.

McClurg said he was not the best person to answer and returned instead to the macro theme. Rising interest rates, he argued, will force investors to become far more selective, because not every company can absorb higher borrowing costs. He also named privacy chains as a sector he expects to matter in the next cycle.

Quiet Trends and the Road Ahead

Asked which trends are attracting capital without media attention, Wang pointed to foreign exchange and tokenized deposits — commercial bank balances represented as transferable tokens — as banks bring dollars on-chain. Sun cited risk management and security, particularly in the wake of recent hacks.

Looking ahead, the panel concluded that money will follow revenue-generating businesses and projects whose users stay after the hype. Wang said she looks for old industries without technology rails, citing philanthropy and donor-advised funds — charitable accounts that let donors contribute assets and recommend grants over time — and offered founders a simple rule: "Don't chase hype." McClurg closed on a lighter note, saying he would back an HVAC or plumbing company "all day" because AI cannot easily disrupt those businesses.

Source: Metaverse Post. Event: HSC.