Crypto: Enthusiasm for the sector has evaporated, but bitcoin is faring better
BlackRock, the world's largest asset manager, has filed for an exchange-traded bitcoin fund, aiming to provide institutional investors with exposure to the original, and still largest, cryptocurrency. The news sparked a wave of similar applications from rival issuers and ignited a rally in Bitcoin's price, ultimately reaching $31,000 — the highest level since June last year.
Crypto enthusiasm evaporates
But if Bitcoin is having a positive week, the rest of the crypto world remains ice cold, as tech investors pivoted from web 3 to AI almost overnight, after major catastrophic events in the space — most notably the sudden collapse of FTX. The exchange, whose list of backers was embarrassing for a large number of VC firms, has caused early-stage investors to take extra caution, keen to avoid rushing into another high-profile disaster. As a result, global venture capital funding has plummeted to $2.4 billion in the first quarter of this year, marking an 80% decline from its peak of $12.3 billion during the same period last year, according to data from Pitchbook.
Adding to the negative sentiment in the crypto space, the SEC recently filed lawsuits against industry giants Coinbase and Binance, accusing them of violating regulatory rules. Indeed, the commission's strict stance could potentially hinder the approval of BlackRock's filing, as it has already rejected a number of similar applications for other bitcoin-centric ETFs.
