Large investors are looking to crypto assets as a way to withstand the fallout of increasing geopolitical tensions as war in Eastern Europe continues to rattle the economic landscape.
According to a new report from Reuters, the current conflict has heightened investor interest in blockchain technology rather than deterring it.
According to fund manager and Decasonic CEO Paul Hsu, there is currently demand of up to $200 million to invest into his company’s hybrid fund as investors move away from assets with higher interest rates such as real estate and bonds.
“The conflict in Ukraine has weaponized our financial and digital economy and really accelerated blockchain adoption.”
According to a note to clients from market research firm Fundstrat seen by Reuters, venture capitalists invested approximately $4 billion into crypto start-ups during the last three-quarters of February. For comparison, new crypto funds have raised a staggering $3 billion in just the last two and half weeks, according to the firm.
As BitBull Capital CEO Joe DiPasquale says,
“There’s really no panic even with the Ukraine conflict,
People are starting funds, encouraged by the appreciation in prices over the last couple of years.”
On the heels of last week’s $560 million Bain Capital Crypto fund announcement, digital assets broker and SFOX CEO George Melka points out that crypto company valuations are at extremely high levels.
“Crypto native companies are still raising at very high valuations and many funding rounds are still oversubscribed,
In fact, crypto startup valuations are probably the highest I’ve seen.”
At the same time, swaths of capital have left US bonds, US money market funds, while the major indices have also underwhelmed compared to crypto markets.
At time of writing, Bitcoin is trading for $39,124, while Ethereum is changing hands for $2,589.
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