Despite evidence of a crypto bear market, venture capital continues to allocate billions to crypto and blockchain project
If you’re looking at the price of Bitcoin (BTC), it’s hard to be bullish these days. The flagship cryptocurrency has once again broken below $40,000, with analysts foretelling of a much bigger decline in the weeks ahead. Unfortunately, many new investors forget to treat crypto as an exponential asset class and, therefore, let short-term price fluctuations weaken their conviction.
Do you want to know who’s conviction in digital assets hasn’t waivered amid the latest downtrend? Venture capitalists — i.e., investors whose sole purpose is to uncover the most promising startups they think are poised for greatness. This week’s Crypto Biz presents jaw-dropping VC investment totals courtesy of Cointelegraph Research. We also take a look at the latest funding deals making the rounds.
Q1 2022 venture capital activity in crypto set to outpace 2021
Cointelegraph Research just put out a startling report on the state of venture capital in the blockchain and crypto industry. As it turns out, VC investment is a lot bigger than anyone could have predicted. In the first three months of 2022, venture funds invested a whopping $14.6 billion into crypto startups — all while Bitcoin and altcoins were trading aimlessly. With all the macro uncertainties in the market today — rising interest rates, generational inflation, war and recession warnings — smart-money investors were pouring billions into crypto. Remember that next time you decide to sell your holdings too soon.
— Cointelegraph Research (@CointelegraphCS) April 27, 2022
Dragonfly Capital raises $650M in tertiary funding round
Speaking of VC, Dragonfly Capital has raised $650 million to launch a new venture fund dedicated to all things crypto. The new Dragonfly Fund III is actually much bigger than the $500 million initially declared to the United States Securities and Exchange Commission back in January. So, despite all the bearish signals in the crypto market as far as prices go, venture capital investors are oversubscribing to funds whose sole purpose is to back blockchain startups. Are you still not convinced you’ve stumbled across a generational investment opportunity? (Not financial advice, of course!)
Former Jefferies FX brokers launching institutional crypto exchange
From Wall Street to crypto — how many times have you heard that narrative? Well, get used to it because legacy finance is about to experience a serious brain drain. This week, former forex brokers from Jefferies announced that they have launched an institutional crypto exchange called Crossover Markets Group Inc. If you never heard of Jefferies, it’s the largest independent full-service investment firm headquartered in the United States. Brandon Mulvihill and Anthony Mazzarese launched the crypto exchange to bring liquidity to institutions looking to invest in digital assets. You can think of it as another on-ramp that will make crypto investments too appealing for institutions to pass up.
— Crossover Markets (@crossover_mkts) April 26, 2022
Fireblocks expands institutional access to Terra’s DeFi ecosystem
Although Terra wants to make decentralized finance (DeFi) accessible to everyone, it’s the institutions that are experiencing serious FOMO. Crypto custody platform Fireblocks announced this week that it had enabled institutional access to Terra. Less than 72 hours later, investors had deposited $250 million into the ecosystem. Their interest in Terra is no doubt connected to the ecosystem’s growing popularity, but it’s also a proxy for interest in DeFi more generally. According to one metric known as total value locked, DeFi is currently worth more than $261 billion.
Don’t miss our trending altcoin debate!
Baron Rothschild of the famous Rothschild banking family once said, “the time to buy is when there’s blood in the streets.” With most altcoins plunging along with Bitcoin, Cointelegraph analysts sat down to discuss the most promising alts for the rest of 2022. You can check out the lively discussion — and our top altcoin picks — in the recording below. If you like what you see, be sure to join us for The Market Report every Tuesday.
Crypto Biz is your weekly pulse of the business behind blockchain and crypto delivered directly to your inbox every Thursday.