The cryptocurrency market is down significantly since the end of 2021, with the overall market losing nearly 70% of its value from its last all-time-high levels of nearly US$3 trillion in November 2021. But despite what some are referring to as the beginning of a prolonged “crypto winter”, venture capitalists (VCs) and industry players remain bullish on the long-term prospects of the industry.
For Jamie Burke, CEO of Web3 accelerator Outlier Ventures, it is critical to look past the price of cryptocurrencies and consider other key indicators of the health of the industry. First, research and development (R&D) activity is persisting, founders and developers continue to join the space, and new startups are being launched at a record pace to commercialise blockchain infrastructure, he wrote in a new blog post.
Second, enthusiasm in the VC community remains high with funding still being actively allocated to new crypto specific funds and deployed. So far this year, a total of more than US$15 billion capital was raised by funds explicitly allocated for Web3 investments, Burke says, up from US$12 billion during the same period in 2021, with a new fund being launched almost every week.
Drawing parallels with previous bear cycles, he predicts that major innovations will likely emerge from this “relative period of calm” and trigger the next bull market, noting that the 2017 bull run was driven by the initial coin offering (ICO) frenzy, the 2020 market upturn, by the rise of decentralised finance (DeFi), and the 2021 crypto surge, by booming adoption of non-fungible tokens (NFTs).
Bank of America (BAC), also known as “Warren Buffett’s favourite bank”, shares the same feeling, stating in a new report that, despite failing token prices and gloomy headlines, investors continue to be interested in the sector. To date, BAC still remains as Berkshire Hathaway’s second-largest holding with a stake valued at US$42.6 billion.
The report, which follows up from its Web3 and Digital Assets Day conference that took place last week, notes that conversations with some of the 160 clients who attended the event showed bullishness in the crypto space. Most were unfazed by the recent market crash, pointing out that some of the most innovative projects were built during previous downturns in the market.
In the retail market, the current correction hasn’t deterred younger investors and newcomers from joining the crypto market, Callie Cox, US investment analyst at online brokerage platform eToro, told Cointelegraph in May. Her company, which ran a poll across age groups in March, found that 58% of investors aged 18-34 thought bitcoin would present “the best buying opportunity in crypto over the next three months.”
Luno, a leading global cryptocurrency app, said in April 2022 that it had reached the 10 million customer milestone. Three millions of these customers joined the platform between April 2021 and April 2022, showcasing rapid adoption of the asset class over the past year.
Founded in 2013, Luno operates in 40 countries including South Africa, Malaysia, Indonesia and Singapore. In the city state, Luno Singapore received in-principle approval from the Monetary Authority of Singapore (MAS) to provide digital payment token (DPT) services in April.
Luno is now looking to cement its position as the go-to platform for first-time crypto investors to get access to crypto in a well regulated environment that safeguards consumer interests. With a key focus on consumer education and consumer protection initiatives, this is an ambition that’s materialised by the launch of a crypto education hub called Luno Discover where beginners have access to guides, research papers, market analysis, as well as the latest industry news.
” The crypto market is fast evolving and we always encourage users to stay as informed so that they can interact safely and securely in the cryptocurrency environment. At Luno, we are committed to prioritise our customers and their financial wellbeing through improving financial literacy in cryptocurrencies and providing a good customer experience. This may mean being proactive about encouraging deeper understanding of key blockchain concepts beyond surface-level and more importantly, recognising individual risk appetite and management, “
said Vijay Ayyar, VP Corporate Development & Global Expansion, Luno.
In Malaysia where Luno is licensed by the Securities Commissions Malaysia, Luno is running the “Move with Luno” campaign, which aims to empower the locals to grow their understanding of digital assets and investing as part of financial literacy. The company said its services will soon be available in Malay language, and more localised educational content will be rolled out.
Disclaimer: This partnership between Fintech News & Luno is for educational purposes only. Luno Singapore has been awarded in-principle approval from the Monetary Authority of Singapore (MAS) under the Payment Services Act 2019. Cryptocurrency is a high-risk investment. The value of cryptocurrency can fluctuate significantly and you may lose the capital you invest. Before investing, we urge you to educate yourself about cryptocurrencies and to familiarise yourself with the risks involved, which are detailed in Luno’s Risk Warning: https://luno.money/24o
Featured image credit: Unsplash
