Cryptocurrency investors experienced nightmare periods with daily volumes falling to 14-15 billion dollars. As if that wasn’t enough, we also saw the architects of the 2021 crypto bull market go bankrupt one by one. Now, with the impact of the collapse of FTX and others fully dissipated, recovery is happening in every area.
Latest Cryptocurrency Report
According to a report by PitchBook, there are more significant developments giving hope to cryptocurrency investors in the medium and long term. The expectation that interest rates will fall this year and the approval of spot Bitcoin ETFs have increased risk appetite. The increase in appetite among individual investors is also reflected in institutional funds.
According to PitchBook, the size of venture capital for crypto has been increasing for two quarters and rose to 2.4 billion dollars in the first quarter of this year. Compared to the last quarter of the previous year, the increase is over 40%. Although a total of 518 investment deals were made, the crucial detail is the state of global capital investments in the same period. While interest in supporting crypto ventures increased by double digits, global venture capital investments fell to a five-year low.
Cryptocurrency Yesterday and Today
Although the increase in investor interest is intriguing, the 10 billion dollar peak of the first quarter of 2022 has not yet been reached. After the last peak, there were significant exits due to the bankruptcies of crypto companies, macroeconomic developments, and geopolitical risks. Now, interest is recovering due to the expectation of interest rate cuts and spot BTC ETFs.
PitchBook analyst Robert Le wrote;
“The recovery in publicly traded tokens and the continuous increase in institutional adoption will drive VC funding up. Investment rounds, especially in the early stages, have become extremely competitive. This situation is combined with the fact that early-stage deals gain higher values than late-stage deals, but… we will see if this trend continues in the coming quarters.”
If Spot Bitcoin ETFs receive the expected interest, we will witness a net size far exceeding 12.6 billion dollars in the next 6 months. Additionally, the approval of Ethereum ETFs could trigger a new “blockchain investment” frenzy, making crypto ventures more attractive.
