How Does the Crypto Crash Affect Investment Trends?

While bear markets are known as a time of renewal for financial markets, it is especially for the crypto market. Being one of the youngest financial markets, the crypto community as a whole is still figuring out what works and what doesn’t from a technology and financial perspective. As this process continues and is reinforced by the last winter, institutional and private investors are working to define new investment trends.

On May 25, Andressen Horowitz doubled down on the blockchain when he announced the raising of a $4.5 billion crypto fund. The move came amid a crash that had caused many investors to flee the crypto market. The fund, which doubled in size from the company’s last fund, also followed the announcement of a new crypto research team in April. Arianna Simpson, general partner at Andreessen Horowitz, discussed the fund’s motivation, telling CNBC:

“Bear markets are often where the best opportunities arise when people are able to actually focus on building technology rather than being distracted by short-term price activity.”

While the company move was one of the biggest news stories of the past month, many other organizations are investing heavily in crypto startups. This has been especially true when it comes to the big players in the space, with companies like Binance and KuCoin forming their own investment and incubation programs.

Binance Labs raised $500 million earlier this month to “boost blockchain, Web3, and value-creating technologies” with participation from DST Global Partners and Breyer Capital. KuCoin, on the other hand, raised $150 million in May in a funding round to expand its trading services with a mission “to support the growth of Web 3.0 and crypto markets.”

With the crypto market cap dropping below the $1 trillion mark, venture capitalists have certainly taken a more measured approach when investing in crypto startups. However, as seen during Consensus 2022, most of them remain optimistic about crypto adoption and the future of blockchain, crypto and Web3.

Xinlu YU, Head of KuCoin Labs; Jason Urban, Co-Head of Galaxy Digital Trading at Galaxy Digital; and Laguna Founder Stefan Rust joined Grit Daily House as part of Consensus 2022. During the event, they sat down with Linqto Chief Strategy Officer Karim Nurani to discuss investing trends in crypto in 2022.

If you missed the chance to attend Grit Daily House in person and want to hear what these experts from the DeFi, venture capital and crypto incubation industries have to say about investing trends in crypto, don’t worry. You can watch the panel in the video below and find our other panels on the official Grit Daily YouTube channel.

Juan Fajardo is News Desk Editor at Grit Daily. He is a software developer, technology and blockchain enthusiast, and writer, fields in which he has contributed to several projects. A jack of all trades, he was born in Bogota, Colombia, but currently lives in Argentina after having traveled extensively. Always with a new interest in mind and a passion for entrepreneurship, Juan is an editor at Grit Daily where he covers everything related to the world of startups.