As per Barry Silbert’s opinion who is the founder and CEO of Digital Currency Group (DCG), in the last few months, the market of crypto sector is in the grip of the bears and has dropped down significantly due to which numerous venture capital funding deals has suffered loss.
Silbert, who is responsible for managing the functioning of the largest venture capital firms in crypto sector with investments in Coinbase, bitFlyer, Blockchain, Chainalysis, Coins, ErisX, Etherscan, Kraken, Ledger, Ripple, and many other large scale companies in the cryptocurrency world, quoted that “We’ve seen half a dozen fundraising deals fall apart over the past month after the lead pulled out. All is not well in crypto VC investor land Good time to remind founders that a signed term sheet does not equal cash in the bank.”
Hard phase for Crypto Market
It’s not so easy to resist in such a bear market and hence one need to manage their crypto company efficiently to counter such prevailing scenario effectively and hence need to understand that if there are tough times to deal with, good time will also come for crypto companies in the same way which complete the cycle of bear and bull market.
Further, ShapeShift CEO Erik Voorhees expressed his opinion that, during a bear market not all venture capital firms’ operates’ well and hence stay out of the market but they return back with huge amount of investment, demand, media coverage, and user activity. However, the same scenario is not applicable to all venture capital firms and there are exceptions such as Andreessen Horowitz, who has shown an outstanding ability to operate well in such downtrend environment and continue to lead with investment process and are very clear about their vision. But, this is just an exception and majority of the venture capital firms experience the same situation as soon as industry starts declining.
Voorhees quoted that “The VCs disappear when markets are down, and flood back in when markets are up. Are they not supposed to be the smart money? Their investing instincts seem little better than the Coors drinking’ taxi driver all excited about Tron three weeks before the bubble pops,”
In the last several months, few firms have made investment in the high range profile consisting of various million-dollar investments in the crypto world start-ups which ultimately helps in delivery of stronger infrastructure around Bitcoin. For instance, Nasdaq and Fidelity has financed ErisX, a cryptocurrency exchange which involves $27.5 million funds for strict regulation of future US market.
Further, ErisX CEO Thomas Chippas claimed that the support from dominant financial institutions is advantageous for the long-term growth and development for various start-ups and quoted that
“With increasing financial support from leading edge firms, ErisX stands to provide the most robust, secure and regulated digital asset offering available to both institutional and individual participants. Closing this second round of funding enables us to continue building our modern platform and expand our team.”