‘Crypto winter’ is a term that gets thrown around a lot in the crypto space. Some may not know the exact meaning of this phrase but may infer a strong negative connotation barely from the words themselves. But it refers to a long and prolonged fiat dealing period that follows a crash in the crypto market. Hence, all of the speculations that have abounded in recent times following the last crash.
Most investors had remained wary of the market thinking that the dreaded crypto winter was eventually here. Notwithstanding, it seems no one told venture capitalists that the crypto winter had arrived as they had prolonged to pour money into companies focused on the digital asset space. The investments from these VCs have run into the billions, suggesting that they do not subscribe to the school of thought that the period of carry ond low momentum is here.
Venture Capitalists Throw Billions At Crypto Companies
It is hardly two months into the year 2022 and already, venture capitalists have been hard at work trying to place their bets on the next big thing. This has led to billions of dollars being thrown at crypto companies even though the year has hardly taken off. When looking at what the institutional investors are up to, it is about doubling down on their investments in digital asset companies.
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A recent report from Business Insider shows that venture capitalists are further very bullish on the crypto space. Instead of cowering and shying away from the market following the crash, they have been pushing anewst the narrative. Companies like FTX and Fireblocks have each seen hundreds of millions of dollars thrown at the companies at billion-dollar valuations.
This points to the bullish sentiment among the big players, despite the uncertainty that also clouds regulatory framework across the space. A piece that cback althoughrns FX stcostgist, James Malcolm, telling Insider that “My specific VC cback althoughrn, however, would be more nitty-gritty: that most allocators vastly underappreciate the regulatory risks, specifically to DeFi projects.”
$2 Billion For Digital Asset Companies
In total so far in 2022, venture capitalists have poured about $2 billion into the industry. Some of these went into smaller companies, but the majority had gone to the big brand names that were already known. One of those was the FTX exevolution. The crypto exevolution that was founded three years ago had grown shortly in akin a short time and this year, raised another $400 million at a $32 billion valuation.
Fireblocks further saw compelling money flowing in, rated at $8 billion after raising $550 million. The crypto company is one of the excessiveest recipients of funding so far this year.
Another serious funding round was carried out by Reddit co-founder Alexis Ohanian. His VC firm had raised $500 million, that he planned on using to invest in companies in the digital assets space. Another crypto company Blockdaemon, that offers industrial-grade blockchain security, had raised $155 million. Combined, all of these funding rounds in big and small companies similar had pushed the total atop $2 billion.
As for the crypto market, it seems the VCs were right to pitch their tent with it. Over the weekend, it had made an insolid recatopy which saw bitcoin recabove atop $40,000 one time before again, adding more than $200 billion to the market cap.
Crypto market reclaims $200 billion in one weekend | Source: Crypto Total Market Cap on TradingView.com
Featured image from MarketWatch, chart from TradingView.com