Cryptocurrency and Blockchain Companies Raised At Least $26.4bn In Five Months

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Cryptocurrency and blockchain companies have raised at least $26.4 billion in 992 transactions in the first five months of the year, according to data from Dove Metrics, a crypto fundraising database.

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The amount tripled the $8,800 million recorded in the same period last year.

The majority of global cryptocurrency funding during the January-May period was taken by infrastructure (34 %), followed by centralized funding (263 per cent).

Cryptocurrencies have plummeted in recent weeks, with Bitcoin down more than 50 percent year-to-date.

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Global cryptocurrency funding Jan-May 2022

The digital asset fell below $18,000 over the weekend and traded below $20,000 on Thursday, down less than a third of its all-time high of $67,734 set in November.

Companies like Coinbase, Gemini Trust, and Crypto.com laid off staff during the recent “crypto winter,” a period when prices remain low for an extended period of time.

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Venture capitalists have also exited cryptocurrencies, according to a report by Bloomberg, despite being among the industry’s biggest cheerleaders.

Funding deals have failed at all stages for startups, which have suffered valuation shocks amid crises like the collapse of stablecoin TerraUSD and withdrawal halts on crypto lending platforms like Celsius and Babel Finance.

Companies are attempting to raise funds at lower valuations than previous rounds. However, some emerging companies in the sector continue to attract strong investor interest. US startup FalconX, a digital asset trading platform and broker for institutional investors, announced on Wednesday that it had doubled its valuation to $8 billion despite a sharp market slump.

The California-based company said it had raised $150 million in a Series D funding round led by GIC and B Capital, a previous investor.

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Is Bitcoin in a ‘death spiral’ and can it recover?

Bitcoin has always divided investors and now it’s the skeptics rubbing their hands and saying they’ve always been right.

Bitcoin have crashed before, but this year has been a bloodbath for the digital token. It’s swimming in a sea of ​​red, caught in a “death spiral,” and has fallen an incredible 55 percent so far this year.

At the time of writing on Monday, Bitcoin was trading at $19,983.31 after falling below $18,000 over the weekend. It is now less than a third of its all-time high of $67,734 set in November. Shame on the crypto hopefuls who bought at the top of this bull run.

The entire altcoin space is on a death spiral, with some losing a quarter of their value in just one trading day, says Vijay Valecha, chief investment officer at Century Financial.

“The crash erased gains from the market’s bull cycle, propelling prices to December 2020 lows and ending the blockchain euphoria.”

There are signs of stress and panic everywhere, with cryptocurrency lender Celsius withdrawing and Freezing remittances citing “extreme” market conditions, a move Binance was quick to follow.

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The point here is that cryptocurrencies are taking over the power of the banking system and giving investors control of their money. Now they can’t get it.

This added to jitters over the cryptocurrency’s stability, which had already been fueled by the collapse of Luna and Terra tokens and the world’s largest stablecoin, Tether, which temporarily unpegged itself from the US dollar in May.

The total cryptocurrency market cap has now fallen below $1 trillion to around $983 billion. In comparison, it hit $3 billion on Nov. 10.

It could get worse, says Valecha. “There is a high possibility that another crypto or exchange will go bust as the market turmoil is now fully reversed.

Bitcoin is the worst-performing major investment of 2022, turning $1,000 into around $450 today, according to personal finance site Finder.com.

However, this follows two years of incredible growth in which Bitcoinis up 292% in 2020 and 59% in 2021.

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Bitcoinis following the same trajectory as other asset classes that benefited from the hysteria of the bull market in the last phase. like Elon Musk’s Tesla Motors, which is down 44.77% year-to-date, and meme stock AMC Entertainment, which is down 55%.05 percent. Hot money deals cool down quickly.

Investors are selling risk and buying safety as the world is on the brink of recession and investors cannot afford to take risks.

The causes of the decline in risky assets are clear, says Fawad Razaqzada, market analyst at City Index and Forex.com.

“It all boils down to inflation. Very hot inflation. This is causing panic among global central banks as they rush to tighten policy to lower price levels.

US inflation rose to 8.6% in May, beating expectations of 8.3%, while in the euro zone it hit an all-time high of 8.1%.

“Other countries are even worse off. In Turkey it is over 70 percent,” says Mr. Razaqzada.

The US Federal Reserve aggressively raised interest rates by 0.75 percent last Wednesday, and more rate hikes are to come, a drastic change from the last 20 years of near-zero interest rates and seemingly unlimited stimulus.

This is the environment that fueled the boom in both US tech stocks and cryptocurrencies, and now it’s over.

Investors are looking for safety in the US Dollar, driving up its value and making Bitcoin even more expensive for non-US investors as it is priced in Dollars. The Fed’s rate hikes are also making lower-risk Treasury bonds more attractive, as 10-year Treasury yields have more than doubled to 3.45 percent this year. A year ago they were still around half a percent.

“Cryptocurrencies pay no dividends or interest, making them even less attractive to yield seekers,” says Mr. Razaqzada.

The post-financial crash euphoria that fueled a variety of investment mania, from meme stocks to non-fungible tokens (NFTs), already seems to be from another world.

When for-profit companies like Amazon, which is down nearly 40% this year, Apple (down 27.06%) and Google-owner Alphabet (down 26.4%) see the current environment as too hot, what hope has a ” Wing”? asset class “and a set” like cryptocurrency?

Blockchain may have its uses, but the market has been driven by speculation and greed. Now the dominant emotion is fear. There is also an extremely practical reason for liquidation. People need their money like Rocket Costs of Living, says Adrian Lowery, financial analyst at investment platform BestInvest.

“Investors were quick to liquidate their holdings, partly for fear of further price declines, but also to prop up bank balances and safety net savings.”

Before the cryptocurrency crash, the theory was circulating that the sector was making its biggest moves while US traders were asleep.

This theory has lost steam as the market falls both day and night, and in any case, crypto investors have bigger concerns right now. The case for bitcoin as digital gold has been shattered, says Myron Jobson, senior personal finance campaigner at Interactive Investor.

“Rather than protecting investors from a stock market crash, it fell much, much faster.“

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