ADVFN News | Pantera Capital CEO suggests blockchain growth will continue despite economic turmoil

The economic scenario may look dire right now, but it’s unlikely to impact blockchain development, according to Pantera Capital CEO Dan Morehead. In an interview with Real Vision on Thursday, the venture capitalist said he believes blockchain technology will work on its own merits, 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 correlates with the S&P 500 or whatever risk metric you want to use. But for the last 20 years he has done his own thing. And that’s what I think is going to happen with blockchain in the next ten years or whatever, it’s going to do its own thing 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 particular focus on scalability, DeFi and gaming projects. “We have been very focused on DeFi in recent years, it is building a parallel financial system. Games are now coming online and we have several hundred million people using the blockchain. There are a lot of really cool games out there and there’s still a lot of opportunity in the scalability industry,” he added.

However, the long-term optimism is at odds with the real decline in venture capital in the sector. August saw the fourth consecutive monthly drop in capital to $1.36 billion. Inflows represent a 31.3% decline from July’s $1.98 billion, with 101 deals completed in August, with an average capital investment of $14.3 million – a 10.1% decline compared to July.

The crypto winter was expected to drive consolidation in the industry, but recent figures revealed that just four deals were completed with VC-backed crypto companies in the United States this quarter – down from 16 deals in the first quarter of the year.

Sandeep Nailwal, managing partner at Symbolic Capital, explained that the bear market has pushed away even the major players in the sector:

“Everyone expected mergers and acquisitions to take off in cryptocurrency as we entered this bear market, but we have yet to see that. I think the main reason for this is that the downturn hit the industry so fast and so hard that even the big companies that were aggressive acquirers were so shocked by the crash that they had to make sure their own balance sheets were in order before they looked for growth elsewhere .”

The FTX crypto exchange does not appear to be affected by this issue. The company is reportedly in talks with investors to raise $1 billion in new financing to finance additional acquisitions during the market downturn. “We’ve seen ratings come down from the highs before the summer and you have to think there are a lot of buyers, especially in the CeFi space, who are looking at these low ratings and thinking everything is for sale now. FTX has certainly sensed this and has been extremely judicious in how they have used these market conditions to drive their growth,” said Nailwal.

The investment arm of FTX announced earlier this month that it had taken a 30% stake in asset management firm SkyBridge Capital for an undisclosed amount, and Canadian cryptocurrency platform Bitvo was acquired by FTX in June.

In the opposite direction, e-commerce company Bolt shelved 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 pull out of its acquisition of digital asset custodian BitGo, citing breach of contract.

BitGo has filed a lawsuit against the cryptocurrency investment firm over the termination of the acquisition, seeking more than $100 million in damages and accusing Galaxy of “inappropriate rejection” and “willful breach” of the acquisition agreement.

Author: Ana Paula Pereira

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