A number of privately held firms have announced cash injections in January. In fact, crypto exchange FTX and its U.S affiliate raised a combined $800 million, with their companies being values at $32 billion and $8 billion respectively.
Another crypto start-up called Fireblocks was valued at $8 billion in a $550 million round, while their rival Blockdaemon scored $155 million on a $1.3 billion valuation. Negotiation of these deals began late last year.
This news follows an incredible year for both cryptocurrencies and the ventures being developed to support its growth in industries. Crypto and blockchain start-ups raised a record of $25 billion in 2021, making this their eighth year in a row with increase. Apart from crypto start-ups, cryptocurrency has been gaining popularity in a variety of industries, such as travel, with companies like Winding Tree and Sandblock utilizing blockchain to streamline and improve the traveller’s experience from bookings to improving loyalty programs. Crypto has also started to be accepted in the iGaming industry with some of the best free spins no deposit casinos like Casumo offering it as a secure payment method.
However, the future direction of the market has become uncertain after a sell-off. Bitcoin became as low as $33,000 in January, down from its peak in November of $69,000. The pull-back in crypto prices has got investors worried about experiencing a crypto winter, the last being in late 2017 and early 2018, where Bitcoin lost as much as 80% since its record-high.
Konstantin Richter, CEO and founder of Blockdaemon claims that ‘If we are entering ‘crypto winter,’ it’s unlike the bear markets we’ve seen before. The crypto market today has institutional adoption. They see the promise crypto holds. Many institutions are long-term bullish on the tech.’
However, central banks are looking to tighten policy in an effort to tame this rising inflation. This is because, along with crypto, global stock has also taken a fall. CEO and co-founder of Fireblocks, Michael Shaulov, claims that the crypto market ‘has been volatile from the very beginning. What is very clear to us is that the investment in the infrastructure is not going to stop.’ Shaulov goes on to say that where or not we are entering into another crypto winter, capital will still continue to flow into the sector as the focus shifts beyond speculative trading on to more sophisticated use cases.
CEO and co-founder of crypto gaming start-up Mythical Games, John Linden, says that this decrease in the crypto market might not be the worst thing. ‘We could head towards a crypto winter — and I think, honestly with any market, that’s not a terrible thing. What we saw was the projects fell apart. They started going away. And the ones that were truly creating value came back 100x within a couple years. I think we’re going to see the same thing.’
In fact, Linden’s company Mythical Games wants to incorporate crypto collections known as NFTs n video games. This raises them to $125 million at a $1.3 billion valuation in November. ‘The NFT boom is just getting started as consumer demand, celebrity influence, and media hype compound’, says Chris Bendtsen, senior analyst at CB Insights.
The trend of rising crypto start-ups has led some investors to question this mismatch in prices in the public and private markets. Sam Bankman-Fried, CEO and co-founder of FTX claims that ‘“I think that there’s been a pretty big dislocation between public and private markets.’