In the next few years, VCs will no longer receive “free money” from funding early-stage crypto startups, so they will need to choose projects more carefully. About declaration Opinion leader Cobie, also known as Crypto Cobain.

“Hit and pray VCs will go bankrupt, losing everything. The successful ones will have a combination of highly concentrated primary investments and secondary investments and understand the market returns,” he added.

Ari Paul, founder of the BlockTower Capital crypto fund, supported Cobie. According to the expert, the market has already reached a one-year high.

Current valuations are based on past rounds with a small percentage of project tokens. He cited XRP token sales as an example – the organizers never managed to sell even 5% “on the market”.

Imo, it’s been over for at least a year, people don’t realize it. Many investments hit all-time highs after a series of upward rounds with little value outside of small groups. As a “liquid analogy”, XRP failed to sell even 5% on the market. https://t.co/Ay34PXTUXS

— Ari Paul ⛓️ (@AriDavidPaul) 17 April 2022

“All predictions come from a small group of crypto insiders/VCs hoping to get out. There is little or no demand to buy the tokens they hold. […] We charge exorbitant prices. […] This 5% is exchanged at higher prices, but the remaining 95% is actually non-tradable.”Paul explained.

According to the founder of BlockTower Capital, only a small group of projects have a different status. As a result, the price dynamics of “zombie startups” are observed – the price remains high, but there is no liquidity.

He emphasized that it is even correct to compare the situation with fictitious trading (wash trading) when the feeling that the asset is being demanded and its price is increasing artificially.

Paul noted that it took years for XRP whales to sell their shares at market prices.

Block’s vice president of research, Larry Cermak, suggested the next two years will be “fun and dynamic.”

All new VC funds with $10 billion in fresh capital are now competing for $50 million seed rounds and none of them buy tokens secondary. The next two years should be a fun dynamic

— Larry Cermak (@lawmaster) 17 April 2022

“All new venture capital funds with total capitalization over $10 billion are competing for $50 million seed rounds and none of them buy tokens on the secondary market.”explained.

Recall that Pantera Capital has raised $1.3 billion in a blockchain fund focused on Web 3.0.

Previously, Haun Ventures raised $1.5 billion in two Web 3.0-focused crypto funds. The firm is associated with former Andreessen Horowitz general partner Cathy Haun.

Source: Fork Log

Sandra

I’m Sandra Torres, a passionate journalist and content creator. My specialty lies in covering the latest gadgets, trends and tech news for Div Bracket. With over 5 years of experience as a professional writer, I have built up an impressive portfolio of published works that showcase my expertise in this field.