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Bailey McCann, Opalesque New York: Even before the recent fallout from FTX, private equity and institutional investors were making moves to back away from decentralized finance (DeFi) and digital assets as crypto prices fell. Now, new data shows just how significant the pullback has been.
According to CoinMarketCap, a company owned by Binance that tracks the market cap of all digital currencies, the total market cap had declined nearly 73% to about $811 billion as of December 23, compared with the peak total market cap of $2.97 trillion in November 2021.
Institutional investor, private equity and venture capital investments in cryptocurrency and DeFi have also fallen. From the start of the fourth quarter through December 16, investors had added $917.8 million, which puts is on track for the lowest total quarterly investment in nearly two years. That total is a far cry from 2021, where according to S&P analysts, investment in cryptocurrency and DeFi by private equity, venture capital, and institutional investors increased nearly five times over the previous year's total to $13.65 billion. S&P Global says the decline began in the second quarter when cryptocurrency prices started falling, but has only been exacerbated by recent scandals.
It may be hard to get those investors back. Crypto prices are will well off their peaks and there are new questions surrounding whether investors will get paid for existing exposures they have to the DeFi/digital assets sp...................... To view our full article Click here
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