Venture deals in the crypto space are falling apart amid a declining market
Barry Silbert, CEO of Digital Currency Group, claims that several financing deals in the cryptocurrency space have been canceled in recent months as a result of a protracted market decline..
Silbert, whose company has stakes in projects such as Coinbase, bitFlyer, Blockchain, Chainalysis, Coins, ErisX, Etherscan, Kraken, Ledger and Ripple, wrote on Twitter: … Not all is well in the venture capital space. It’s time to remind the founders that the approved terms of the deal are not money in the bank yet. “.
As ShapeShift CEO Eric Voorhees explained, bear and bull cycles affect venture capital firms in the same way as retail investors. According to him, venture capital firms tend to avoid participating in deals when the market falls and return when new investments, demand, media attention and users come to it..
Some firms, such as Andreessen Horowitz, did not abandon their ideas and continued to invest, despite the fall in cryptocurrency prices. However, most of them traditionally decided to suspend their active activities..
“Venture capital disappears when markets fall and returns when markets rise. Shouldn’t he be smart money? Their investment habits seem to be not too different from the views of taxi drivers who rave about Tron three weeks before the bubble burst, ”commented Voorhees.
Over the past few months, we have seen several multi-million dollar investments in projects aimed at strengthening the infrastructure of the cryptocurrency market. So, Nasdaq and Fidelity took part in financing the regulated crypto exchange ErisX.
“With new financial backing from leading firms, ErisX is on the alert to offer retail and institutional investors the most reliable, secure and regulated digital asset trading offering,” ErisX CEO Thomas Chippas said at the time..
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