The momentum hasn’t stopped despite the current price, cryptocurrency start-ups are having a solid start to the year! Some companies have secured hundreds of millions of dollars in funding despite the steep drop in digital asset prices that we currently face.
Several privately-held firms have injected more cash into businesses in January. Crypto exchange FTX and its U.S. counterpart raised a total of $800 million. Valuing the companies at $32 billion and $8 billion respectively.
A crypto infrastructure start-up, Fireblocks and its rival Blockdaemon bagged $550 million and $155 million, respectively.
The industry has seen tremendous growth as funding for blockchain start-ups soared eightfold in 2021. Allowing the total funding to increase from $3.1B all the way up to $25.2B.
Beginning of a crypto winter?
Even considering the volatility, especially after the sharp decline in crypto prices in January. The world’s largest cryptocurrency ended the month down over 18%, making it the worst start to a year since the beginning of a bear market in 2018.
This sharp decline has got some investors wary about the severe downturn which is referred to as a “crypto winter.” The last such event happened in late 2017 and early 2018, when bitcoin lost as much as 80% since its then-record high.
As the Federal Reserve and major banks have confirmed the expectation of high interest rates which has resulted in the slump in digital assets. Bitcoin has often been referred to “digital gold” as it is uncorrelated with other financial assets.
Michael Shaulov, CEO and co-founder of Fireblocks says that, whether or not the market is teetering on the edge of another crypto winter, capital will continue flowing into the sector as focus moves beyond “speculative” trading to more sophisticated use cases. This will allow for mass adoption for payments in stablecoins and moving financial securities onto the blockchain.
