Unicorns find shelter… More than $1T has been wiped from the crypto market since November, when it was worth $3T. Despite the crypto currency plunge, venture capital is doubling down on crypto companies. Bahamas-based crypto exchange FTX just raised $400M in its latest funding round, giving it a $32B valuation — getting it closer to rival Coinbase. FTX's app lets retail and institutional buyers make sophisticated crypto and token trades, as well as mint, auction, or trade NFTs. Its US sister exchange, FTX US, announced new funding at an $8B valuation last week:
- Fee’d Up: FTX makes its money off trading activity and fees, including a 5% fee to trade NFTs.
- Flashy Backers: FTX owns the naming rights to Miami Heat stadium and is the MLB's official crypto exchange. Power couple Tom Brady and Gisele Bundchen are also investors and brand ambassadors.
Wild ride for cryptos... Bitcoin and Ethereum, the two biggest cryptos, have fallen 40% from their highs as investors brace for inflation-fighting Fed moves and ditch riskier assets. It's been bumpy: bitcoin hit a one-year low in July, dropping to $30K, before more than doubling to its record in November. Now, it's on pace for its worst month since May. Despite the sell-off, venture funding for crypto has been booming. Venture investments in crypto and blockchain startups reached $33B last year — and are expected to surpass that this year.
It's too soon to tell if a "crypto winter" is here… Institutional crypto funds added a record $9.3B to their investment funds in 2021, and cryptos aren't alone in seeing declines: The Nasdaq index is down 10% this year. Also, on-chain action (aka the volume of crypto transactions and activity happening on blockchains) hasn't reached anywhere near 2018 levels when activity crashed. But some bears like JPMorgan CEO Jamie Dimon say crypto is worthless until there’s more regulation. Now, President Biden is reportedly planning moves: Barron's reported Biden is planning an executive order that could help set the stage for crypto and digital asset regulation.