Despite falling cryptocurrency prices and recent company crashes, one of the key investors behind cryptocurrency hedge fund Pantera Capital believes there has never been a better time to start a chain company. blocks.
As part of a January 23 to post Discussing the coming year from various Pantera Capital executives, Paul Veradittakit, General Partner at Pantera Capital, explained that “on average,” people working in the crypto space are more educated and passionate about cryptocurrencies than in previous cycles.
Strong start to the year! https://t.co/gFe5fUM0gT
— paul.nft (@veradittakit) January 23, 2023
Overall, he said, “we are seeing a higher percentage of startups entering the market with strong teams: entrepreneurs coming from established crypto startups like Coinbase, larger tech companies like Facebook, Uber, and Square, and legacy financial institutions like JP Morgan and Goldman Sachs.”
The market is still very bearish, with some companies going out of business and prices picking up lost ground, but Veradittakit thinks it’s still a worthwhile time to be in the space, citing the billions invested in the space by companies. venture capital firms in the first half of 2022, adding:
“In our experience, bear markets typically represent a time when there is less construction noise and distraction.”
“In addition, we have observed that institutions and companies are more open than ever to working with blockchain companies to improve their businesses,” said Veradittakit.
The general partner said he has also seen a volume shift toward highly regulated exchanges and DeFi-based decentralized exchanges as people try to protect their assets from bad actors, which could inspire the next generation to jump in. to the crypto space.
“With increased scrutiny around trust and security, we believe there are opportunities for startups in areas such as self-custody, security, insurance and identity,” he said.
Meanwhile, Dan Morehead, the CEO of Pantera Capital, expressed a similar optimistic view towards the crypto space, arguing:
“Despite the lower prices, I think the space is clearly in a much better position than ever before.”
According to Morehead, since 2017, the developer infrastructure, which was “virtually non-existent back then,” has improved dramatically.
“It’s much easier to write smart contract-based systems now than it was in the previous cycle,” he said.
“Every other area of the stack has been improved, whether it’s test suites or automated tools to catch common bugs in smart contracts, to have IDE support for Solidity,” Morehead added.
Related: Pantera Plans to Raise $1.25 Billion for Second Blockchain Fund: Report
Morehead also points to scalability solutions that enable lower transaction fees as a breakthrough for the space, as “decentralized exchanges cannot compete with centralized exchanges if the fees are too high.”
There is still a lot of Fear, Uncertainty and Doubt (FUD) floating around following the FTX collapse and resulting contagion in 2022, but Morehead believes the industry is still very much alive.
“People were saying, ‘crypto is dead,’ but I think it was one of the best times to get into the space, start building serious stuff and a great time to invest capital in crypto. It really is dark before dawn “. he said.
