Monday Market Musings >>> Crypto Had an Awesome Year… Still Think it's Just a Fad?
Picture Credit: Jeremy Bezanger
Cryptocurrencies had an outstanding year as investments in blockchain related technology and projects shot through the roof. Venture capital funds poured in as much as $30 billion into crypto this year alone, which is almost quadruple the previous all time high of around $8 billion.
“We’ve moved beyond just digital gold. We’ve got financial services, art, gaming as a subcategory of NFTs, Web 3.0, decentralised social media, play-to-earn, all of that made investors think ‘We don’t have enough exposure’” commented Spencer Bogart, who is a general partner at Blockchain Capital LLC which is a San Francisco-based company. Since their inception in 2013, they have become one of the largest investors in the industry.
What 2021 has revealed about the crypto world is that there are no limits. From Bitcoin being worth more than $68,000 to NFTs of kittens being sold for hundreds of thousands of dollars, the crypto world has experienced record breaking gains due to its explosion of popularity and demand. “Investors are funding anything and everything” commented Rob Le, an analyst at Pitchbook.
Picture Credit: Executium
Investors are finally seeing the true potential of the crypto market and many companies reaped extraordinary benefits from this year’s crypto frenzy. FTX for example secured a $1 billion Series B funding round in July that raised its overall valuation to $18 billion. Even Dapper Labs, the company behind CryptoKitties, raised over $350 million from investors (one of those investors was Michael Jordan, five-time NBA MVP award winner).
However, even though the crypto market saw an enormous amount of growth this year, there was also a dark side associated with it. The crypto market is still largely unregulated, and many have taken advantage of this fact and misled people into investing in fake crypto projects. One of the most prominent cases that was uncovered this year was the “Save the Kids” token, where celebrity influencers on social media misled their large fan bases to invest in a cryptocurrency which had nothing to do with charity, instead it was simply a way of making a quick buck for those social media influencers.
Crypto is here to stay, and it has both its negatives and positives. So, it is down to individual investors to navigate and study this fresh online market to reap its maximum benefits.
December 20th 2021 | 6:00 PM