Crypto start-ups are still raising serious cash despite a slump in prices
Cryptocurrency start-ups are having a solid start to the year, bagging hundreds of millions of dollars in fresh cash even as investors grow wary about a steep drop in digital asset prices.
Several privately-held firms announced bumper cash injections in January. Crypto exchange FTX and its U.S. affiliate raised a combined $800 million, valuing the companies at $32 billion and $8 billion respectively.
Fireblocks, a crypto infrastructure start-up, was valued at $8 billion in a $550 million round, while rival Blockdaemon scored $155 million on a $1.3 billion valuation. It's worth noting some negotiations for these deals likely began late last year.
It follows a blockbuster year for both cryptocurrencies and the ventures being developed to support the growth of the industry. Crypto and blockchain start-ups raised a record $25 billion in 2021, marking an eightfold increase year-on-year, according to CB Insights data, as venture capitalists sought to ride a rally in bitcoin and other tokens.
Still, the future direction of the market has become more uncertain after a sharp sell-off. Bitcoin fell as low as $33,000 in January, down from an all-time peak of nearly $69,000 in November. The world's largest cryptocurrency ended the month down over 18%, marking its worst start to a year since the beginning of a bear market in 2018.
The pullback in crypto prices has got some investors worried about a more severe downturn known as "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.
«If we are entering 'crypto winter,' it's unlike the bear markets we've seen before,» said Konstantin Richter, CEO and founder of Blockdaemon. «The crypto market today has
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