Crypto-industry: new valuation reality, impending wave of layoffs and the closure of thousands of cryptocurrencies ()

  • Crypto startups raised $ 25.2 billion in funding rounds in 2021 (2020: $ 3.1 billion)
  • Now there is a threat of a wave of layoffs and a new valuation reality for crypto startups
  • Leaders of cryptocurrencies predict the collapse of thousands of cryptocurrencies
  • There are currently 13,506 cryptocurrencies, 1,705 have already completely disappeared from the scene
  • Bitcoin has been declared “dead” hundreds of times, but has emerged stronger from each crisis

Sand in the cryptomechanism, or worse? The recent fall in prices has a number of different effects and by no means only for investors. A new infographic from Block-Builders.de shows how industry representatives are struggling with this, why this can be dangerous for the crypto market, and why it is still wrong to write off the scene already.

In 2021, crypto startups raised $ 25.2 billion in funding rounds. A bang: the previous year it was only 3.1 billion US dollars, the increase is 713 percent.

The market has now cooled down significantly. Bitcoin is currently trading around $ 30,500, far from its record high of $ 69,044. Various developments nurture the fear of a long crypto winter. One consequence of this is that the financing situation has deteriorated massively due to a new valuation reality. Start-ups in particular are affected.

Relatively established candidates such as the crypto bank Nuri are also affected. This recently stated that up to 20 percent of the workforce would have to be laid off.

There is no shortage of gloomy predictions these days. For example, executives from major crypto companies, including Bertrand Perez and Brad Garlinghouse, predict that thousands of cryptocurrencies and blockchains will collapse in the near future. Perez compares the market to the early days of the internet, where there were too many companies offering no real value and disappearing.

As the infographic shows, there are currently 13,506 cryptocurrencies (Coingecko). 1,705 digital currencies have now completely disappeared from the scene, which often means nothing less than a total failure from an investor’s point of view.

But does bitcoin also get a handle on it? Some industry observers share this view. According to data from “99bitcoins”, the mother of all cryptocurrencies has been certified hundreds of times in recent years as dead. An example of this is an article in the “Süddeutsche Zeitung” from 2018. “Bitcoin is clinically dead”, as it said, and also according to the statement, the Bitcoin scene should recognize, “that their project probably no longer has a great future”. At the time of writing, Bitcoin could be bought for well under $ 4,000.

There is no shortage of challenges; think of the discussions about the CO₂ footprint, geopolitics, the collapse of presumed stablecoins, the miners’ problems with profitability at current prices, or the new course of the Fed that investors seem to be taking as an option, money to be deducted from risk assets. And yet: While many cryptocurrencies may disappear from the scene, the current situation does not have to be detrimental to the most important and significant projects. The market is taking a deep breath, and what history has shown many times before can repeat itself: Bitcoin is returning stronger and setting new heights.

About Block-Builders.de

Block-Builders is a news and information platform that offers news, analytics and guidance to cryptocurrencies and investors. Block Builders GmbH is based in Berlin.

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The author only provides information here, there is no investment advice, recommendation or invitation to buy or sell investments. Investment transactions involve risk, so it is advisable to consult professional investment advisers. In this context, we would like to point out that investing in stocks (including hot stocks or penny stocks), certificates, funds or warrants is sometimes associated with significant risk. A total loss of invested capital can not be ruled out.

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