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FTX meltdown: Crypto VCs bat for decentralised finance and Web3 native start-ups

The past few months have seen multiple crises in the crypto space take sheen off the emerging sector

November 09, 2022 / 07:07 PM IST
Sam Bankman-Fried, founder of crypto exchange FTX, in the Bahamas. (Image: Bloomberg)

Sam Bankman-Fried, founder of crypto exchange FTX, in the Bahamas. (Image: Bloomberg)

With venture capital investors in crisis-hit crypto exchange FTX such as Sequoia, Lightspeed, and Tiger Global staring at losses on their investment due to its fire sale to competitor Binance, start-up investors in the crypto space say the episode will push funding to Web3 native projects and decentralised finance companies.

“Surprises like these are definitely not a positive for an asset class which needs far more transparency, stability and predictability,” said Nitin Sharma, General Partner and Global Web3 Lead at Antler.

“Events like these, such as circular token games or liquidity crunches leading to the sudden collapse of a large player, don’t help inspire more confidence for VC-PE investing either. However, for me, the long-term infra story for Web3, and especially from India, is still a solid theme we will continue to back at Antler,” he added.

The past few months have seen multiple crises in the crypto space take sheen off the emerging sector. It began with the Terra debacle in May, which tipped the virtual asset market into a nosedive. And since then, two more firms, crypto exchange Celsius and venture capital firm 3AC, have buckled under market pressures.