This news service talks to a European business that invests in a form of venture capital that seeks to unearth promising opportunities in the blockchain space.

Theta Capital Management, which says it is the largest European investor in blockchain venture capital, argues that opportunities for returns are substantial. It is planning new VC vintages to capture opportunities by spreading risks and spotting opportunities early.

As blockchain, or distributed ledger technology (DLT), grows, it is upending traditional finance, cutting out “middlemen” and forcing investors to master a new, mind-bending vocabulary. Investors can capture revenue from blockchain “protocols” that execute various functions. These protocols provide software-based infrastructure for tasks historically performed by exchanges, lenders and derivatives venues.

Theta, which is based in Amsterdam, recently spelled out the terrain in an annual report on the sector, The Satellite View.

WealthBriefing spoke to Ruud Smets, chief investment officer of Theta, about developments in the market and his own firm’s business model. (We also spoke to Smets three years ago.)

The firm has six blockchain vintages in its investment range; it is preparing to launch TBV VI, its seventh.

“We are moving towards a lower-friction, global financial system that operates around the clock, with blockchain protocols providing more of the underlying infrastructure,” Smets said. “The movement of finance on-chain is no longer theoretical. The train has left the station, and incumbent financial institutions now need to decide how they will adapt.”

To give one example, Robinhood, the online trading platform which achieved notoriety from the GameStop share-trading drama of about six years ago, is leaning into the crypto story. At the start of July this year, it launched Robinhood Chain, a network compatible with Ethereum, which is a decentralised blockchain with smart-contract functionality.

Another hot area is the stablecoin market. These are entities on the blockchain pegged to fiat currencies, commodities or financial instruments. Several jurisdictions, such as Hong Kong, have brought in regimes to regulate stablecoins. In the UK, the Bank of England and Financial Conduct Authority are working on a regulatory regime. In the world’s largest economy, the US Securities and Exchange Commission said in April 2025 that some stablecoins would not fall under federal securities rules, paving the way for growth in this market.

Smets said there is a strong US dollar link to all this stablecoin action.

“Stablecoin adoption is, at its core, global dollar adoption. People and businesses around the world want access to US dollars for saving, trade and investment, and stablecoins give them a simple digital route to obtain and use them,” Smets said. “The US has recognised the strategic opportunity. Stablecoins effectively allow America to export the dollar over the internet, extending its global reach and creating an additional source of demand for US Treasuries held as stablecoin reserves.”

There is plenty of crossover between this blockchain world and wealth management. For example, this publication has spoken to firms such as AMINA Bank, which said in July that it had integrated a crypto payments network known as Mesh. The stablecoin area has been a hotspot: real-world stablecoin payments doubled in 2025 to $400 billion even as broader crypto markets declined.

Family offices are increasingly investing in digital assets but struggle to source regulatory support, according to a survey from Ocorian, an organisation which provides services to HNW individuals, family offices, financial institutions, asset managers and corporates.

How to get into the party
Specialist blockchain venture capital funds, of the kind that Theta invests in, finance the companies and developer teams building this new infrastructure. Through equity, tokens or both, they gain early economic exposure to protocols that hopefully explode into major networks.

Theta is the kind of specialist player that has ridden the crypto wave as it has become increasingly mainstream. Founded in 2001, Theta, which has deployed capital into the space since January 2018, works with institutional capital.

“Most investors do not make the connection that they can invest in the infrastructure itself. This is not simply a bet on the price of bitcoin. It is an investment in the rails on which an increasing share of financial activity may run,” Smets said.

Theta Capital’s investor base includes wealthy European families, HNW individuals, foundations and institutional investors. Many of them started to put money into blockchain venture capital before institutions entered the fray, he said.

The firm has invested with more than 40 specialised blockchain VC managers. Each vintage typically allocates to eight to 12 managers, with up to 30 per cent allocated to direct co-investments alongside them. Theta Capital’s total firm-wide assets under management have grown to approximately $1.4 billion.

This publication understands that across Theta’s six existing blockchain vintages, performance ranks in the top decile of the broader venture capital universe. Theta declined to comment on a specific figure.

The AI angle
As set out in Theta’s report, blockchain technology is driving stablecoin payments, tokenised securities and funds, on-chain lending, prediction markets and perpetual futures. Perpetual futures, which are continuously traded derivative contracts without a fixed expiry date, have developed particularly rapidly on blockchain-based markets.

There is the AI point to consider.

“Together with the infrastructure required for AI agents to make payments and enter financial transactions autonomously, these are central areas of focus for our more recent vintages,” Smets said.

This is a market without rest days.

“Software does not keep banking hours. As AI agents become economic actors, they will require programmable, always-on infrastructure for payments, trading and collateral. Blockchain is the natural financial infrastructure for that emerging agentic economy,” he said.

What are the risks?

Bitcoin and other cryptocurrencies have been volatile, and turbulence of the kind that keeps financial regulators awake at night must be managed. For Smets, none of this means on-chain finance will not happen, but rather raises the question of how it will happen. Regulators have work to do.

“Regulation remains incomplete and differs significantly between jurisdictions. In the US, the GENIUS Act has established a federal framework for payment stablecoins, while the CLARITY Act continues through the legislative process for the broader digital asset market. The direction of travel has become considerably more constructive, but translating legislation into detailed rules and achieving greater consistency between jurisdictions will still take time,” he said.

(The CLARITY Act seeks to classify digital assets into three categories; gives the Commodity Futures Trading Commission exclusive regulatory jurisdiction over spot and cash markets for digital commodities; creates a provisional registration regime; protects decentralised finance (DeFi); creates a new capital-raising pathway; and bans the US Federal Reserve from issuing a central bank digital currency.)

Smets said that technical and operational risks remain important. These include smart-contract vulnerabilities, cyberattacks, custody failures and dependencies on infrastructure such as bridges and price-data providers.

Tokens can also be highly volatile, liquidity can contract rapidly, and institutional-grade infrastructure for custody, valuation, reporting and risk management is still developing, he continued.

“These risks do not negate the opportunity, but they reinforce the need for specialist due diligence, disciplined manager selection and diversification. Investors should approach the sector as a specialist venture allocation rather than as a simple directional bet on cryptocurrency prices,” Smets added.

The firm is also putting the terrain under the microscope for a conference in Amsterdam on 1 October, with speakers including Patrick J Witt, Executive Director – President’s Council of Advisors for Digital Assets at the White House. That's an example of how mainstream the digital assets agenda has become.