Many venture capital companies have broken agreements with companies in the encrypted sector in recent months.
Barry Silbert, founder and CEO of Digital Currency Group, a leading cryptocurrency firm investing in large-scale cryptanalysis like Coinbase, bitFlyer and Blockchain, said that asset price declines encrypted between encrypted startups and venture capital companies have started to fall.
Despite the disturbing trend, Binance, the world's largest cryptocurrency exchange for daily volume and active monthly visitors, has expanded its cryptographic incubator into five major cities.
How does Binance expand its cryptographic incubator?
Changpeng Zhao, the managing director of Binance, better known by the community as CZ, said that many venture capital companies are concerned only with profit, which is understandable, and they tend to move towards exits such as market struggles .
Although many venture capital companies are supporting investments in cryptic companies, CZ has stated that Binance is more comfortable in investing in early-stage companies than the bull market.
CZ He said:
"While many VCs have" stopped ", we are now investing more comfortably, valuations are more reasonable, most have a prototype / product, only strong teams have remained – much better investment opportunities than ATH."
In the bull market of 2017, various ERC20 token and blockchain projects have achieved market valuations above $ 1 billion, in some cases without functioning products and active user bases.
At present, the co-creator of Ethereum Vitalik Buterin has questioned the $ 500 billion valuation of the encrypted market, suggesting that it is difficult to justify such an assessment given the level of adoption of decentralized applications (dApps) and blockchain-based systems at the moment.
"So the total capitalization of cryptogenin has just reached $ 0.5T today, but have we gained? How many unallocated people have we veered? How many stocks have we created that have substantial use? A low added value per user for use? a blockchain is fine, but in this case it is necessary to recover it in volume, "Buterin He said at the moment, adding: "The answer to all these questions is certainly nothing, and in some cases it is quite significant, but not enough to say that the levels of $ 0.5T are significant." Not enough. "
Since then, the valuation of many projects has declined substantially, while the valuation of commercial activities such as exchanges, OTC markets and custody solutions providers has maintained relative stability.
It is a cycle
Over the past nine years, the cryptography market has gone through a cycle of bubble-crash-building clashes in a total of five times. Each correction led to the strengthening of the infrastructures surrounding the asset class.
Many venture capital firms could resist until the market is restored. However, some venture capital firms and companies like Binance, Andreessen Horowitz, Nasdaq and Fidelity are continuing to finance projects in space, with the long-term growth of the cryptocurrency sector in mind.
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