Markets

How Crypto Founders Are Preparing for the Next Bear Market – DL News

Published

1 year ago

3 June, 2024

FinCrypt Staff

How Crypto Founders Are Preparing for the Next Bear Market – DL News

Crypto founders expect another downturn within 18 months.
Elliot Chun, partner at Architect Partners, describes his thinking.
Some areas of concern include the enthusiasm surrounding fluid resumption protocols.

Crypto founders are already preparing for the next crisis.

This is according to Elliot Chun, partner at Architect Partners, a firm that advises crypto companies on mergers, acquisitions and financing strategies.

“They all come to me saying, ‘I’m preparing for the next drop in 18 months and I want to capitalize on the current change,’” Chun said.

“I’ve never had so many founders and executive teams say we need to make something happen within 18 to 24 months.”

The fear is justified. The brutal crypto crisis of 2022 caught many companies off guard.

Crypto companies like Bitcoin mining company Core Scientific and exchange Voyager have had to declare bankruptcy, not to mention spectacular fraud-driven blowups like FTX.

Still, savvy startups can turn the current bull run to their advantage by taking advantage of Wall Street’s interest in crypto as well as venture capitalists’ renewed interest in the sector.

Be ready

Chun said crypto companies are preparing differently depending on their profiles.

Join the community to receive our latest stories and updates

“Most of the time, they look for a strategic partner – a company in the traditional financial sector that has a similar vision,” Chun said. “They could be there as business partners or eventually acquire the crypto company outright.”

Naturally, companies that raised significant capital in 2020 or 2021 don’t think the same way as those that didn’t – like recent startups.

The former often seek to generate enough revenue so that private capital can buy them. One way to do this is to establish a global presence, as the industry is still largely fragmented on a regional basis.

Elliot Chun (Darren Joseph/Darren Joseph)

Companies can also choose to expand their suites of products and services.

“Institutional clients don’t want to work with five different groups to custody, tokenization, increasing funding – they need comprehensive, comprehensive services,” Chun said. “There aren’t many who can do all that.”

Recent startups, Chun said, have one or two great products and are run by people who believe in the industry’s long-term potential — but being a founder is hard work, so they’re open to being acquired.

Learning from 2021

Enter Wall Street’s entry into space through Bitcoin spot exchange-traded fundsand increased adoption, the prospects for well-run crypto companies have never looked better, Chun said.

It’s a different feeling from the excesses of 2020 and 2021, when VCs’ fear of missing out “led to unrealistic valuations, which in turn led to poor operating discipline,” Chun said.

Companies acted as if the abundance of capital would last forever.

“People were spending money on ridiculous things — like $150,000 on a party at a conference, for a pre-revenue company,” Chun said.

But companies that survived the crisis had “much greater” operational discipline, Chun said.

Some are even generating revenue.

Reestablishment of liquid

Even though this bull market is healthier than the last, concerns still remain.

Chun cited the hype surrounding EigenLayer and others reestablishment protocols – which allow investors to secure the Ethereum blockchain and other protocols, such as oracles and bridges, with the same stack of Ether.

“The concept of liquid restoration it’s essentially internal crypto-native recipes being layered on top of others, to the point where no one understands how to untangle these things,” Chun said. “This is dangerous.”

Coinbase researchers expressed similar concerns in a April report.

Eigenlayer did not immediately respond to a request for comment.

These projects are receiving a lot of capital from VCs because they generate quick and surprising returns, Chun said.

Investors who allocate capital to projects will tend to jump ship immediately after the token allocation is unlocked, Chun said – similar to venture funds selling their shares immediately after a company goes public.

While companies take three to seven years to go public, crypto projects can launch their coins live within months.

“VCs can go back to their liquidity providers and say we got 80% returns in a year – and they look like geniuses,” Chun said.

Memecoins

Private investment is also warping markets on a larger scale, Chun said.

Original crypto investors could leverage their knowledge of the technology to their advantage in the past, but that has changed.

Everyone has access to the same information and can execute that information at the same speed.

So how do professional investors gain the upper hand?

“Their advantage is just getting early access to projects,” Chun said. “Whether it’s seed rounds or equity rounds, with token distributions that normal people don’t have access to.”

This could explain why retail traders resort to memecoins that doesn’t have billion in tokens ready to be unlocked, leveling the playing field.

“Retailers actually have the ability to prove once again that they can get more returns from something that doesn’t have a venture fund – or a founder,” Chun said. “I can’t blame them for trying.”

Still, Chun said memecoins that don’t seek to advance the space will ultimately be their undoing.

“The market will dry up.”

Tom Carreras is markets correspondent for DL News. Have a tip about VCs and crypto? Get in touch at tcarreras@dlnews.com

Source

Markets

Crypto Markets Rebound as Spot Bitcoin ETFs Attract Massive Inflows

Published

11 months ago

17 July, 2024

FinCrypt Staff

Crypto Markets Rebound Ahead of Early Ethereum ETF Approval

This week saw $722 million worth of Bitcoin spot ETF inflows, including the largest daily inflow in a month.

Cryptocurrency markets rallied on Wednesday, driven by inflows into spot Bitcoin exchange-traded funds (ETFs).

The price of Bitcoin (BTC) is up 3% over the past 24 hours to last change hands at $65,200, according to CoinGecko. Ethereum (ETH) is up 2% and is trading at $3,471. Solana (SUN) and Polkadot (POINT) increased by 4%.

Bitcoin spot ETFs saw $422 million in daily inflows on Tuesday, the highest in the past 30 days, according to Far side data, . The all-time record for a single day was $1.05 billion on March 12.

Among Tuesday’s top contributors, BlackRock’s IBIT led with $260 million in inflows, followed by Fidelity’s FBTC with $61 million. This week has already seen more than $722 million in inflows.

Among the top 100 cryptocurrencies by market cap, Worldcoin (WLD) led with a 28% increase, followed by Helium (HNT) with 20% and Lido DAO (LDO) with 15%.

Worldcoin, a decentralized identity project led by OpenAI CEO Sam Altman, announced is extending the lockups for early investors and team members. This means that tokens will be gradually released through 2029, instead of the original 2027 plan. Token unlocks are generally seen as a negative because they increase supply and early investors can sell their tokens for profit.

Meanwhile, XRP, the token of the XRP Ledger network, jumped 8% after the CME and CF benchmarks introduced new indices and reference rates for XRP.

U.S. stocks faced a downturn on Wednesday. The S&P 500 fell 1%, while the Nasdaq Composite and Dow Jones Industrial Average both fell 2%.

Source

Markets

Altcoins on the cusp of a major breakout – WLD, AR, and INJ prices could surge by 20% in the coming days

Published

11 months ago

17 July, 2024

FinCrypt Staff

Altcoins on the cusp of a major breakout – WLD, AR, and INJ prices could surge by 20% in the coming days

Crypto markets appear to have been taken over by the bulls as major tokens have surged above their crucial resistance zone. Bitcoin surged above $65,000 while Ethereum was above $3,500, and XRP, which had remained passive for quite some time, surged over 40% in the past few days to hit $0.6. The uptrend has been captured in most altcoins, with Worldcoin (WLD), Arweave (AR), and Injective (INJ) leading the rally. Here’s what to expect for these tokens in the coming days.

Worldcoin (WLD) Price Analysis

O Worldcoin Price has been trading inside a descending wedge since it marked a new ATH near $12 in the final days of Q1 2024. The recent price action helped the price break out of the upper resistance of the wedge, breaking above the crucial resistance zone between $2.21 and $2.39. Market sentiments have changed, but technicals suggest that the bulls may remain passive for a while, which could offer some room for a bearish pullback.

The price broke out of the wedge with a significant increase in volume, but the current volume suggests that the bulls have taken a step back. Meanwhile, the RSI is about to reach the upper boundary, which could attract bearish forces. Additionally, the DMI has undergone a bullish crossover, but the decline in the ADX suggests that the rally may remain consolidated above the gains. Therefore, the WLD price is expected to maintain a horizontal consolidation between $3 and $3.3 and trigger a fresh rally to $4.4 during the next bullish rally.

Arweave (AR) Price Analysis

Arweave formed a strong base around $25, which helped the rally trigger a recovery during the bearish attack. Mt. Gox and German terror forced the price to fall below $20. However, the recent price action has brought the altcoin within the bullish range and raised expectations of maintaining a decent uptrend for a few more days.

AR price has hit one of the major resistances around $30 to $31.5, which could act as a strong base once overcome. The buying volume is slowly increasing, which could keep the bullish hopes for the rally high. Moreover, the supertrend has just flashed a buy signal, indicating a clean reversal of the trend. Therefore, AR price seems primed to maintain a healthy uptrend and rally above $40. However, if the bulls maintain a similar trend, making new highs above $50 may not be a tedious task for the bulls.

Price Analysis of Injective (INJ)

Injective price has been showing sharp strength since the beginning of the year and hence, the recent turnaround is expected to revive a good uptrend going forward. The bears engulfed the rally to a large extent, but the recent price action suggests that the bulls have regained their dominance. Therefore, INJ price is expected to maintain a strong uptrend with a bearish interference on the way down.

INJ price has surged above the lower support zone and has registered consecutive bullish candles. Although the volume is below the required levels, the OBV is maintaining a sharp uptrend. Furthermore, the Ichimoku cloud lead span B is heading towards the lead span A and a healthy crossover indicates the start of a new uptrend. However, INJ price may be out of the bears’ reach once it secures the resistance zone between $30.77 and $32.12, which seems to be on the horizon.

Source

Markets

Ethereum at $3.5K, Exchange Supply Hits 34-Month High

Published

11 months ago

17 July, 2024

FinCrypt Staff

Ethereum at $3.5K, Exchange Supply Hits 34-Month High

Ethereum (ETH) supply on exchanges has hit a 34-month high as the asset’s price surpassed the $3,500 mark.

ETH has risen 2.3% over the past 24 hours and is trading at $3,490 at the time of writing. The second-largest cryptocurrency — with a market cap of $419 billion — briefly touched an intraday high of $3,517 earlier today.

ETH Price, Whale Activity, RSI, and Exchange Supply – July 17 | Source: Santiment

Ethereum’s daily trading volume also increased by 7.6% to reach $19.8 billion.

According to data provided by Santiment, the supply of Ethereum on exchanges has reached $19.52 million ETH. This level was last seen in September 2021, when the asset was trading around the same price.

On the other hand, data from the market intelligence platform shows that the number of whale transactions has fallen by 12% in the last day — falling from 8,730 to 7,629 unique transactions per day.

The move shows that the supply of Ethereum on exchanges has been increasing with small deposits rather than large transactions from whales.

Additionally, the ETH Relative Strength Index (RSI) is currently hovering at the 60-mark, per Santiment. The indicator shows that Ethereum is slightly overbought at this price point, but it may not be in a critical position due to its large market cap.

One of the main drivers of Ethereum price increase is ETH spot expectations ETFs in the US Investment products are scheduled to start trading on July 23rd.

Source

Markets

Bits + Beeps: How to Play the ‘Trump Trade’ in Cryptocurrencies After the Assassination Attempt

Published

11 months ago

17 July, 2024

FinCrypt Staff

Bits + Bips: How to Play the ‘Trump Trade’ in Crypto After the Assassination Attempt

Also, how much will the Fed cut rates (and when)? What will be the inflows into ETH ETFs? And what is the near future for Bitcoin?

Posted on July 17, 2024 at 12:00 PM EST.

Listen to the episode at Apple Podcasts, Spotify, Capsules, Source, Podcast Addict, Pocket molds, Amazon Musicor on your favorite podcast platform.

In this episode of Bits + Bips, hosts James Seyffart, Alex Kruger and Joe McCann, joined by guest Jack Platts, dive into the market reaction to the recent assassination attempt on former President Donald Trump, analyzing how this event will influence the 2024 US presidential election and the cryptocurrency markets.

They also cover potential rate cuts: Could there be a cut in July? How big could the September rate cut be? Could the decision be influenced by the upcoming election?

They also give their predictions on what percentage of BTC ETF inflows the ETH ETFs will reach, and James talks about what he expects for Grayscale’s ETHE (hint: his outlook would be positive for ETH).

Finally, they delve into what’s next for Bitcoin as the German government runs out of BTC and Mt. Gox distributions begin. Just now?

Program Highlights:

Whether Trump’s shooting decided the election and whether the event caused a “flight to safety”
How election markets are becoming a place to watch election probabilities and whether cryptocurrencies “lean right”
Whether rate cuts will occur in July or September and by how much they will cut: 25 bps or 50 bps
How Joe sees the relationship between global liquidity cycles, rate cuts, and the potential rise of Bitcoin
What are the new updates about Ethereum ETFs and their expected launch?
Why Solana Hasn’t Performed Significantly Better Since Trump News
What Market Breadth Indicates About the Current Market Rally and the Impact of Rates on Small Caps
Everyone’s predictions on ETH ETF inflows and how much outflow we’ll see on Grayscale’s ETHE
What’s Next for BTC After German Government Exits Bitcoin and Mt. Gox Giveaways Starting This Week