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Pantera Capital’s CEO suggests Blockchain growth will continue despite economic turmoil

Pantera Capital’s CEO suggests Blockchain growth will continue despite economic turmoil

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According to Dan Morehead, CEO of Pantera Capital, the economic situation may seem dire right now, but it is unlikely to affect the development of blockchain. In an interview with Real Vision on Thursday, the venture capitalist said that he believes that blockchain technology works on its own basis, regardless of the conditions indicated by traditional risk indicators:

“Like any disruptive thing, like Apple or Amazon, there are brief periods when it correlates with the S&P 500 or whatever risk metric you want to use. But over the last 20 years, it’s done its own thing. And so I think blockchain happens with in the next ten years or whatever, it will do its own thing based on its own principles.

In the first half of this year, Pantera Capital raised about $1.3 billion in capital for its blockchain fund, with a particular focus on scalability, DeFi and gaming projects. “In recent years, we have been very focused on Def, it is building a parallel financial system. Gaming is now coming online and we have a couple of hundred million people using blockchain. There are a lot of really cool gaming projects out there, and there’s still a lot of opportunity in the scalability sector,” he added.

However, the long-term optimism is at odds with the industry’s actual decline in venture capital. According to data from Cointelegraph Research, capital fell for the fourth consecutive month in August to $1.36 billion. Revenue represents a 31.3% drop from July’s $1.98 billion. August saw 101 deals with an average capital investment of $14.3 million – down 10.1% from July.

Crypto winter was expected to boost industry concentration, but recent figures from Crunchbase revealed that only four deals with VC-backed crypto companies were completed in the US this quarter – a setback from 16 deals in the first quarter of the year. .

Sandeep Nailwal, CEO of Symbolic Capital, explained that the bear market has displaced even the big players in the industry:

“Everyone expected M&A to start in crypto when we headed 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 quickly and so intensely that even the big companies that were ready to be aggressive buyers were so shaken by the collapse that they had to make sure their own balance sheets were in order before looking. elsewhere for growth.”

This problem does not seem to affect the crypto exchange FTX. The company is said to have been in talks with investors to raise $1 billion in new funding to fund additional acquisitions during the bear market. “We’ve seen valuations come down well before the summer highs, and you have to think that there are a lot of buyers out there, especially in the CeFi space, who are looking at these low valuations and thinking to themselves, everything is for sale now. . FTX really felt that, and they were very cautious in how they leveraged these market conditions to drive their growth,” Nailwal said.

FTX’s investment arm announced earlier this month that it had bought a 30% stake in asset management firm SkyBridge Capital for an undisclosed price, and FTX acquired Canadian crypto platform Bitvo in June.

In the opposite direction, e-commerce company Bolt blocked plans to buy crypto and payments infrastructure company Wyre after announcing a $1.5 billion deal in April. Weeks earlier, the cryptocurrency investment company Galaxy Digital decided to abandon the acquisition of digital asset custodian BitGo, citing a breach of contract.

BitGo filed a lawsuit against the crypto investment firm seeking to stop the acquisition, seeking more than $100 million in damages and accusing Galaxy of “improper repudiation” and “willful breach” of its acquisition agreement.