The economic outlook may look dire at the moment, but it is unlikely to affect blockchain development, according to Pantera Capital CEO Dan Morehead. In an interview for Real Vision on Thursday, the venture capitalist said that he believes that blockchain technology will work based on its own fundamentals, regardless of the conditions indicated by traditional risk metrics:
“Like anything disruptive, like Apple or Amazon stock, there are short periods of time where it’s correlated to the S&P 500 or whatever risk metric you want to use. But over the last 20 years, it’s done its thing. And that’s what I think is going to happen with blockchain in the next ten years or whatever, it’s going to make its own history based on its own fundamentals.”
During the first half of this year, Pantera Capital raised around $1.3 billion in capital for its blockchain fund, with a special emphasis on scalability, DeFi, and gaming projects.. “We’ve been very focused on Defi the last couple of years, it’s building a parallel financial system. Gaming is coming online now and we’ve got a couple of hundred million people using blockchain. There’s a bunch of really cool gaming projects out there, and there are still many opportunities in the scalability sector,” he added.
Nevertheless, long-term optimism contrasts with the real decline in venture capital in the sector. August saw the fourth consecutive month-on-month decline in capital, down to $1.36 billion, according to data from Cointelegraph Research. Inflows represent a decrease of 31.3% compared to USD 1,980 million in July, with 101 operations closed in August, with an average capital investment of USD 14.3 million, 10.1% less than in July.
The crypto winter was expected to spur consolidation in the sector, but recent figures from Crunchbase reveal that only four deals were closed with VC-backed crypto firms in the United States this quarter, down from 16 transactions in the first quarter. of the year.
Sandeep Nailwal, Managing Partner of Symbolic Capital, explained that the bear market has alienated even the big players in the sector:
“Everyone expected mergers and acquisitions to take off in the crypto sector as we head into this bear market, but we haven’t seen that happen yet. I think the main reason for this is that the recession hit the industry so fast and hard that even large companies poised to be aggressive buyers were so shocked by the crisis that they had to make sure their own balance sheets were in order before looking elsewhere for growth.”
Cryptocurrency exchange FTX does not appear to be affected by this issue. The company has reportedly entered into talks with investors to secure $1 billion in new funding to finance additional acquisitions during the bear market. “We’ve seen valuations come down a lot from pre-summer highs and you have to think there are a lot of buyers out there, especially in the CeFi space, who look at these low valuations and think everything is for sale right now. FTX no He certainly felt it and was extremely cautious in how he took advantage of these market conditions to fuel his growth.”Nailwall said.
FTX’s investment arm announced earlier this month that it had acquired a 30% stake in asset management firm SkyBridge Capital for an undisclosed amount, and Canadian cryptocurrency platform Bitvo was purchased by FTX in June.
In the opposite direction, E-commerce firm Bolt has halted plans to acquire Wyre, a cryptocurrency and payments infrastructure company, after announcing a $1.5 billion deal in April. Weeks earlier, cryptocurrency investment firm Galaxy Digital decided to abandon its acquisition of digital asset custodian BitGo, citing a breach of contract.
BitGo filed a lawsuit against the cryptocurrency investment firm for ending the takeover, seeking more than $100 million in damages, and accusing Galaxy of “unfair repudiation” and “willful breach” of its takeover agreement.
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