March 3rd, 2023

Crypto community reacts as Bitcoin bear market fears continue

The crypto market saw a sharp decline at 12 am UTC on March 3. The price of Bitcoin (BTC) fell by over 5% from around $23418 to $22163, according to CryptoSlate data. Most of the drop occurred within an hour as the BTC price fell by over $1,000 in seconds.

The price of the second-largest cryptocurrency followed suit with a 5.4% decline from around $1,643 to $1,554 around the same time.

Many other cryptocurrencies also suffered losses as Dogecoin (DOGE) slipped 5.8% over the past 24 hours, while Cardano (ADA) and XRP (XRP) are down 3.78% and 2.73%, respectively.

The fall in crypto prices triggered liquidations that crossed $251 million over the past 24 hours, most of which were triggered after the sharp dips in prices, according to Coinglass data.

Binance saw the most liquidations, around $90 million over the past 24 hours, the data indicates. OKX followed at a close second with $75.83 million of liquidations over the past day.

Over $222 million worth of long positions were liquidated, while short positions made up a little over 8% of the total liquidations over the past 24 hours, Coinglass data shows.

Total Ethereum (ETH) positions liquidated over the past day stood at $49.24 million. BTC liquidations stood at $84.06 million, according to Coinglass.

What caused the dip

Crypto bank Silvergate is owned by Silvergate Capital Corporation, whose share price dropped 49% upon the announcement that it will delay its annual report to the Securities and Exchange Commission. The firm said it needed more time to complete its audit.

Silvergate bank said that it may file for bankruptcy owing to a massive sell-off. It is also unable to repay its debts. Many firms, including Coinbase, Circle, and Paxos severed all ties with the troubled bank.

Regarding the crypto market, Sora Ventures CEO Jason Fang told CryptoSlate:

Obviously there’s the current fud surrounding Silvergate and Binance, and we think that the market isn’t in a clear bull yet, but there are some certain sectors that outperform everytime the market dumps, it could be sectors surrounding L2, LSDs, zk rollups, etc. Since the narrative is different every time, we think keeping an eye on the market during these drops is definitely worth it, and its a good metric to observe which sectors the smart money is betting on.

Alex Kuptsikevich, FxPro senior market analyst, believes the crypto market tumbled in reaction to Silvergate’s uncertain future. He told CryptoSlate:

“The plunge into this area came as a market reaction to the potential bankruptcy of Silvergate. The news triggered a wave of stop orders on fears that the situation could cause a domino effect in the industry.”

Kuptsikevich said that the dip pushed Bitcoin’s price below its 50-day moving average, “which does not bode well for the short-term outlook, although this signal will only be reliable at the close of the day.”

He added that the market sentiment is “moderately positive” and supports the “buy-the-dip” mood. Many Twitter users claimed to have bought Bitcoin and taken advantage of the price fall.

But many investors panicked and, per Kuptsikevich, were scared that the Silvergate crisis could soon escalate to the FTX level.

In response to the latest events, investor Anndy Lian told CryptoSlate:

“Silvergate Bank’s share price has fallen by more than 50% to an all-time low after it announced it would review its books with auditors and warned of several headwinds. A vast majority of the bank’s crypto-friendly industry clients have left or are leaving the company, including Coinbase, Circle, Paxos, Crypto.com, Galaxy, and Gemini which have all suspended business with the bank. The bank’s clients leaving was reported to have happened less than a day after the announcement of the audit review.

This means that it is now harder for crypto companies to sustain relationships with a U.S. bank. Many institutional clients will not be able to transact big amount of crypto until they find better safer solutions to work around. As we speak, I know some of my friends are moving their funds out of some banks in Puerto Rico.

There will be a big vacuum in the short term. I know many of the crypto organisations are now looking for offshore solutions and the more adventurous ones are shifting to Asia to run their trading desks.”

Many analysts claim the recent dip is a signal for the BTC price to keep going down, but others are more optimistic. Quantum Economics CEO Mati Greenspan told CryptoSlate:

“Including yesterday’s sudden dip, Bitcoin and crypto are having one of their strongest years ever. No major support lines have been broken and the long term chats look bullish as ever.”

Source: https://cryptoslate.com/crypto-community-reacts-as-bitcoin-bear-market-fears-continue/

Anndy Lian

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com

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February 23rd, 2023

Exploring The Investment Trends Of Crypto Venture Capitalists In Today’s “Bullish” Market

The value of a cryptocurrency can be influenced by various factors, including news about the cryptocurrency and its underlying technology, government regulations, and overall market conditions. The market can also be influenced by investor sentiment, which can be affected by a wide range of events. Just a month ago, everyone is still saying its a bear market. As of this week, everyone is cheering for the current bull run. Bitcoin reached its highest price since mid-August by breaking through the price ceiling of US$24,000. This was largely attributed to investors liquidating almost US$70 million of predominantly short-position bets.

There are many different types of investments in the cryptocurrency space, and the popular specific investments can vary over time.

More Popular Types Of Cryptocurrency Investments

Buying And Holding: This is the most straightforward and common investment strategy. Investors buy a cryptocurrency like Bitcoin or Ethereum and hold onto it for the long term, with the expectation that its value will increase over time.

Mining: Mining involves using computer hardware to solve complex mathematical problems and verify transactions on a blockchain network. Miners are rewarded with newly minted cryptocurrency as an incentive for their work.

Staking: Staking involves holding a certain amount of a cryptocurrency in a wallet and locking it up to support the network’s security and transaction processing. In exchange, stakers receive rewards in the form of newly minted coins.

Initial Coin Offerings (ICOs) and Initial Exchange Offerings (IEOs): ICOs and IEOs are ways for companies to raise funds by selling newly created cryptocurrencies to investors. This strategy can be risky as some ICOs and IEOs have turned out to be scams.

Cryptocurrencies have several investment theses. Some investors believe that they have the potential to replace traditional fiat currencies, while others see them mainly as a store of value or a means of exchange. In addition, some investors see the underlying blockchain technology as having the potential to revolutionize a variety of industries, from supply chain management to identity verification.

Some Specific Investment Theses For Cryptocurrencies

The use of cryptocurrency as a means of exchange: Some people believe that cryptocurrencies will eventually be used as a primary means of exchange, replacing traditional fiat currencies.

The store of value thesis: Some people believe that cryptocurrencies will eventually be used as a store of value, similar to gold.

The blockchain revolution thesis: Some people believe that the underlying blockchain technology has the potential to revolutionize a wide range of industries and that investing in cryptocurrencies is a way to get in on the ground floor of this technological revolution.

The “greater fool” theory: Some people believe that the price of a cryptocurrency will continue to go up as long as someone is willing to buy it at a higher price, even if there is no intrinsic value to the cryptocurrency. This is sometimes referred to as the “greater fool” theory of investing.

Venture capitalists (VCs) are individuals or firms who provide funding to early-stage companies in exchange for an equity stake. In the cryptocurrency space, VCs have traditionally invested directly in cryptocurrencies or blockchain-based startups, but recently there has been a shift in focus towards investments in blockchain infrastructure and applications.

The fall of FTX and other crypto exchanges has led VCs to become more cautious about investing in cryptocurrencies directly. Instead, they are looking to invest in companies that are building out the underlying technology and infrastructure of the blockchain. This includes companies that are developing blockchain-based platforms, building decentralized applications, or working on other blockchain-related projects.

The reason for this shift is that many VCs see a long-term potential for blockchain technology to disrupt various industries and believe that investing in the underlying infrastructure will yield better returns than investing directly in cryptocurrencies, which are known for their volatility. Another reason for this shift is that the regulatory landscape for cryptocurrencies is still uncertain and can create risks for investors. By investing in blockchain infrastructure and applications, VCs can mitigate some of these risks and potentially realize greater returns in the long run.

Some Specific Areas Of Interest For VCs In The Cryptocurrency Space.

Blockchain infrastructure: VCs are increasingly supporting startups working towards building a robust blockchain infrastructure. These companies focus on developing innovative solutions that can potentially revolutionize the blockchain ecosystem. One key area of interest for VCs is the development of new consensus algorithms. These algorithms enable network participants to agree on a shared state of the blockchain without relying on a centralized authority. Some companies are working on proof-of-stake (PoS) algorithms that reduce the energy consumption associated with proof-of-work (PoW) algorithms, which are used by Bitcoin and other cryptocurrencies.

They are also investing in layer1 companies, which are startups that focus on building the foundational infrastructure layer of the blockchain. These companies are working on creating new and innovative technologies that can potentially improve the scalability, security, and performance of the blockchain. Former team members from traditional finance giant Jump Trading have established a tech startup called Monad Labs, which has raised $19 million in seed funding. The company intends to create a new blockchain that addresses the shortcomings of existing layer 1 protocols. According to a statement, the Monad blockchain will be introduced on a testnet in the coming months, with plans for mainnet deployment later this year. The blockchain will use the proof-of-stake consensus mechanism and be compatible with the Ethereum Virtual Machine (EVM), allowing projects on Monad to interact with the EVM software platform. This interoperability will enable developers from other blockchain projects to construct decentralized applications that can work together on the Ethereum network.

Web3 solutions: Web3, also known as Web 3.0, is the next iteration of the World Wide Web, and it is built on blockchain technology. It is designed to be more decentralized, secure, and open than the current Web. VCs are looking for projects that align with the core principles of Web3 and have the potential to drive its adoption and growth. This is another rising trend. Just last week alone, I noted more than $20 million were raised in the Web3 space.

Caldera, a provider of Web3 application infrastructure, has secured a total of $9 million in funding from two investment rounds. The funding was spearheaded by established financial powerhouse Sequoia Capital and digital currency-focused firm Dragonfly.
UK-based startup Nefta, which focuses on Web3 in the gaming and entertainment industry, has disclosed raising $5 million in a seed funding round led by the Future Fund of venture firm Play Ventures.
In a seed funding round co-led by Insignia Venture Partners, MindWorks Capital, and Signum Capital, Sending Labs has raised $12.5 million. The company’s objective is to offer a more accessible approach for developers and users to construct and engage with decentralized communication-based applications (dapps).

I noted amongst the VCs in my network they are also looking at blockchain applications. VCs have also invested in companies that are using the blockchain to build new applications, such as supply chain management platforms, decentralized finance (DeFi) platforms, and decentralized identity solutions. Interoperability and cross-chain solutions, for example, aim to enable different blockchain networks to communicate and interact with each other and are also one of the top investment choices.

In my opinion, investing in blockchain infrastructure and applications is likely to promote the expansion and maturation of the cryptocurrency ecosystem, and potentially generate more sustainable returns for investors over the long term. However, it’s important to recognize that VC investment is just one aspect of the broader cryptocurrency ecosystem. Other investors, such as hedge funds, family offices, and individual investors, may have differing investment theses and strategies, which can also impact the market. It’s crucial to stay informed about the various factors that can influence the cryptocurrency space and adapt investment strategies accordingly. As a licensed fund manager and a VC myself for over a decade, this is my humble note to all.

“To achieve the best returns in the crypto space, it’s important to believe in the underlying technology, focus on community growth, and capitalize on market trends. By understanding the technology behind a particular cryptocurrency and its potential for solving real-world problems, investors can make informed investment decisions that align with their long-term goals.”- Anndy Lian

Source: https://www.benzinga.com/23/02/31015303/exploring-the-investment-trends-of-crypto-venture-capitalists-in-todays-bullish-market