welcome back to Chain reaction.Last week, we talked about an arrest in the crypto world that had investors sweating. This week, we are talking about getting over the general malaise of a crypto winter. You can sign up for this newsletter and have it delivered to your inbox every Thursday on the TechCrunch newsletter page.
Crypto has had a brutal couple of months, and yet the show goes on, metaphorically and literally for the Winklevoss twins who, despite announcing significant layoffs and suffering a federal lawsuit this week against their Gemini crypto exchange, have kicked off the tour for several cities for his cover band “Mars Junction” which plays hits by Blink 182, The Killers and Rage Against The Machine. The gang’s billionaire leaders (both immortalized by Armie Hammer in the movie The Social Network) remade their image with a substantial stake in the bitcoin ecosystem years ago, and while Gemini trails many competitors, the exchange hit a valuation. of $7.1 billion last year, but lawsuits from investors and regulators coupled with layoffs could spell trouble ahead nonetheless. High-flying valuations were a hallmark of the 2021 cryptocurrency bull run during which unicorn startups were minted on a weekly basis as money poured into the space, even as consumer interest in web3 services seemed grow more modest. But as investors watch Coinbase’s public tribulations, startups that didn’t raise enough are about to see more hostile terms come their way. This week, The Block and Bloomberg reported that crypto lending platform BlockFi was taking a massive valuation cut and was aiming to raise a round at a $1bn valuation just over a year after raising cash at $3bn. millions. Investors are becoming more conservative with their capital, but they are also becoming a bit more skeptical about exit options. For public giants like Coinbase, the shock to their share price has left them struggling, turning a hiring spree on a dime and rescinding offers to prospective employees. Coinbase’s misfortunes are likely a sign of tough times ahead for private crypto startups that may not have raised as much space as needed. Companies that are in dire need of growth capital will not be in a good position, although venture capitalists like a16z will certainly try to keep the party going for early-stage startups with new funds devoted largely to new bets. The tech industry as a whole hasn’t seen a prolonged downturn in a couple of decades, but crypto startups have dealt with plenty of brutal “winter” periods. As a result, one would hope that they would be a little better prepared for the end of the good times… and yet many major crypto firms are pointing out that this latest crash caught them by surprise.
the last pod
I’m Anita – In this week’s episode, Lucas and I sadly had to be the bearers of some bad news as the crypto market downturn begins to take its toll on employees. Some of the biggest crypto firms are joining the recent wave of tech startups laying off people en masse. We talked about Coinbase’s recent move to terminate job offers it had already extended to candidates who had committed to work there, Gemini’s decision to lay off 10% of its staff, and how exactly things have gotten so ugly. so fast. We also talk about the new bill that Senators Cynthia Lummis and Kirsten Gillbrand introduced this week that could provide long-awaited regulatory clarity for cryptocurrencies, explaining why we think it’s a long-term win for companies building on the cryptocurrency market. space and investors who own digital assets. . Sriram Krishnan, General Partner of the crypto team at a16z (and co-host of “The Good Time Show”), joined us to shed light on some of his recent Twitter feuds and how his experience as an executive at some of the social networks bigger. companies informs its approach to consumer investment web3. Subscribe to Chain Reaction on Apple, Spotify, or your alternative podcast platform of choice to stay up to date with us every week.
follow the money
Where startup money moves in the crypto world: Mobile investment platform Delphia raised a $60 million Series A led by Multicoin Capital. Calaxy, a web3 social marketplace, secured $26 million in strategic funding co-led by Animoca Brands and the HBAR Foundation. Entropy, a decentralized crypto custodian, raised $25 million for its seed round led by a16z. Adim, the web3 entertainment startup of “It’s Always Sunny in Philadelphia” actor Rob McElhenney, raised $5 million in seed funding in a round led by a16z. Decentralized exchange ApolloX secured an undisclosed amount in seed funding from investors including Binance Labs and Kronos Research. Euler Finance, a noncustodial crypto lending protocol, put up $32 million with Haun Ventures as the lead investor in its Series A. Data infrastructure provider Vybe Network announced the closing of a $10.5 million Series A investment dollars led by FTX. Mash, a Lightning Network-enabled payment platform, secured $6 million in seed funding co-led by Castle Island Ventures and Whitecap Venture Partners. Cryptio, an institutional crypto-accounting platform, raised $10 million in a Series A led by Point Nine. Floor, the NFT portfolio management startup, raised an $8 million seed round led by 6thMan Ventures.
the week on web3
As Anita heads to the Consensus crypto conference in Austin this week, we’ve been thinking about the aspects of web3 that still seem to get crowds excited and energized, even during a tough period in the markets. Web3 entrepreneur Tux Pacific summed it up well: “In fact, I’ve never felt like I’ve been in a space where it was more acceptable for people to be so different. if you go to a [crypto] conference, it’s full of weird, weird people,” Pacific told Anita in an interview. Pacific, one of the rare trans and queer founders in crypto backed by a big-name company, also spoke about how his unique experience informs his new approach to building a crypto custody company. It might be a bold time to raise capital to invest in web3, but Ledger, a hardware-focused cryptosecurity startup, has partnered with French venture firm Cathay Innovation to do just that. The pair raised $110 million to invest in early-stage crypto startups. Ledger founder and CEO Pascal Gauthier told Anita why he is so confident that now is a good time to deploy capital in crypto. Solana Labs is doubling down on South Korea, where it is seeing growing demand for games and NFTs. Solana Ventures and the Solana Foundation have established a $100 million fund to support startups in the country – Jacquie has the details.
Here’s some of this week’s crypto analysis you can read on our TC+ subscription service (written by TC’s Jacquelyn Melinek): Proposed bipartisan US crypto bill could be a “sigh of relief” for the industry This week, US Senators Cynthia Lummis, a Republican from Wyoming, and Kirsten Gillibrand, a Democrat from New York, proposed a cryptocurrency bill that could provide roadmaps in the digital asset space. The bill addressed many corners of the crypto world with market players calling it a “step in the right direction” and not an “escape” from strict regulation, but rather a change with clearer rules. DOJ Case Against Former OpenSea Exec Could Label NFTs As Securities, Says Former SEC Attorney a plan to commit insider trading in [NFTs]”, according to a press release from the United States Attorney’s Office for the Southern District of New York. Now, this case could have the potential to determine whether or not NFTs are defined as securities.
Thanks for reading and listening. You can sign up for this newsletter and have it delivered to your inbox every Thursday on the TechCrunch newsletter page.