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Prominent VC: Investors Remain Committed to Cryptocurrency Despite Bear Cycle

Last Updated March 4, 2021 5:09 PM
Joseph Young
Last Updated March 4, 2021 5:09 PM

Barry Silbert, the founder and CEO of Digital Currency Group (DCG), the largest venture capital firm focused on the cryptocurrency market, has said that investors are still committed to the cryptocurrency market and are showing interest despite the cryptocurrency bear cycle.

Over the past few years, DCG has evolved into the largest and most influential venture capital firm within the cryptocurrency and blockchain sector, funding various multi-billion dollar cryptocurrency businesses and dominant firms including Japan’s leading exchange bitFlyer, the world’s largest digital asset exchange Coinbase, major crypto asset wallet Blockchain, and US-based multi-billion dollar digital asset company Circle.

With a suite of public cryptocurrency investment vehicles such as the Bitcoin Investment Trust, Ethereum Investment Trust, and Ethereum Classic Investment Trust that are traded on public stock markets, DCG and GrayScale, a digital currency investment arm of DCG, have become the primary point of contact for large-scale investment firms and venture capital firms eyeing an entrance into the cryptocurrency market.

Best Fundraising Week in 2018

As CCN.com reported earlier today, on June 23, the digital asset market lost over $13 billion as major assets including Bitcoin, Ethereum, Ripple, Bitcoin Cash, and EOS recorded losses in the range of 5 to 11 percent. Still, Silbert revealed that Grayscale had the best fundraising week for 2018 over the past five days, having raised more than $20 million.

“Best fundraising week for 2018 for the Grayscale family of funds, over $20 million raised this week What bear crypto market?” Silbert said. 

Interestingly, various investment firms and prominent retail traders in the traditional finance sector have started to demonstrate enthusiasm towards the digital asset market over the past few weeks, amidst one of the worst corrections in the recent history of the market.

Bitcoin suffered a 69 percent drop since its all-time high in December, experiencing the third worst correction in its history after a 95 percent correction in 2010 and a 80 percent correction in 2014. But, investors have started to show more interest in the digital asset market in contrast to early 2018, when the value of most digital assets were at all-time highs.

Jim Cramer, who previously asked his viewers on CNBC Mad Money to be cautious about Bitcoin and the rest of the cryptocurrency market, recently said that banks should fear for cryptocurrencies and that young portfolio managers have started to show more optimism towards the emerging asset class rather than the traditional finance market. Cramer said: 

“Then there are the potentially existential threats that I just mentioned: blockchain, which some people believe could possibly end the banks’ hegemony over stock clearing, and cryptocurrencies, which are the populist insurgents of the blockchain movement. I’m not saying this is the right way to look at banks, but it’s certainly how younger portfolio managers view the group, and they are winning right now judging from where the group is trading.”

Trader Mindset

As soon as the cryptocurrency market dropped more than 60 percent from its all-time high, the trader mindset of investors in the public markt like Cramer was triggered and obtained a sudden interest in the market.

Previously, when the market was at an all-time high, the digital asset market was not appealing for investors. Now that the market is down, an increasing number of investors are attempting to enter the market and the newly established demand from investors will likely be shown in the latter half of 2018.

Featured image from Shutterstock.