These firms lost $278 million and $214 million, respectively. Several prestigious investment firms that backed it are already marking their stakes to zero. The biggest ones include Paradigm, a cryptocurrency-focused investor, and Sequoia Capital. Backers included a sovereign wealth fund, a public pension fund, and dozens of venture capital firms invested $2 billion in FTX, propelling its valuation to $32 billion in Jan. Nonetheless, FTX backers/supporters witnessed a massive blow. As BeInCrypto reported, the FTX Group (FTX, FTX.US, and Alameda) commenced voluntary Chapter 11 Bankruptcy proceedings in the U.S. FTX: Latest Suffering and Victims’ ListįTX, once one of the most renowned crypto exchanges, faced a MASSIVE liquidity crunch on Nov.6, 2022. Three Arrows Capital, DeFiance Capital, and others rode the same bandwagon.Īccording to a local news outlet, South Korean investors suffered from particularly brutal losses: “About 200,000 investors in South Korea are presumed to have invested in TerraUSD and Luna,” the representative told BeInCrypto. Hashed wallet sustained losses amounting to over $3.5 billion, according to CoinMarketCap data from April. Meanwhile, the South Korea-based early-stage VC Hashed too suffered the same fate. In a press release on May 13, the firm noted that it had seen losses of $300 million in the first quarter of the year, but it didn’t clarify whether LUNA accounted for the losses. How much LUNA and UST Galaxy were exposed to is not yet known. Galaxy Digital CEO Mike Novogratz was among the first significant investors who revealed their Luna investments post the crash.Īfter much thought, it’s time to talk about last week and, more importantly, the weeks ahead. But what about the Venture Capital (VC) firms that had invested in the Terra ecosystem? Did they get burned as well? We may have heard many stories of people who lost their savings in the Terra-Luna event. It ended dramatically after its stablecoin (UST) lost its peg to the dollar, beginning in May 2022. Six months later, they doubled their investments by contributing to a $150 million Terra ecosystem fund and other prominent VCs like BlockTower Capital and Delphi Digital. Galaxy Digital and Pantera Capital were two of the largest firms to back Terra, contributing to a $25 million funding round in Jan 2021. Some of the main ones were: Source: Crunchbase 2wfc00loDs- Mike Novogratz January 5, 2022ĬrunchBase data shows 29 investors funded Terra. I’m officially a Lunatic!!! Thanks And thank you my friends at Smith Street Tattoos. Both of the incidents saw crypto companies (and their supporters) toppling like dominoes. Two notable names come into the picture: Terra LUNA billion-dollar crash and the ongoing FTX collapse. Such adverse conditions led to the collapse of multi-million dollar crypto companies/platforms. This niche market saw a sharper downturn due to the high risk associated with the asset class and plunging cryptocurrency prices. Price corrections, volatility, and regulatory hiccups, among other factors, contributed to the fall. This year has been a challenging one for the cryptocurrency sector. Given the rise in hacks to collapses within these investor-backed crypto platforms, this doesn’t come as a total surprise. According to Bloomberg, VC firms invested $4.44 billion in crypto start-ups in the quarter, a 37% decline from the same period in 2021. In the third quarter, venture capital investment in the crypto industry sank to its lowest level in more than a year. While that number might sound a lot, the graph below narrates a different story. VCs invested $14.2 billion into crypto across 725 deals in the first half of 2022, according to KPMG’s September report. They are thinking about how to fundamentally change their fund structure so that it is centralized and allows for a more inclusive environment for many investors to play in the space. VCs are increasingly diversifying their funds into the crypto market. The rise of blockchain technology has changed the way investors could think about venture capital funds. (Apple, Microsoft, Google, Amazon, and Facebook) began as VC-backed start-ups. All the top five most valuable companies in the U.S. public companies in 1979, representing a third of all stock market value. Investments from venture capital funded more than half of all U.S. Investments in crypto, from Wall Street VCs to deep-pocket investors, highlight flaws in risky financial strategies that fuelled the crypto boon.
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