Why current price is not an indicator of crypto progress
Over the last 9 months, the crypto asset market has lost a significant amount of value. The market rallied to exuberant levels in December and January before a sudden drop and drawn out regression to where they are now. What might be seen as a market disaster, could also potentially be viewed through a different lens.
Let’s imagine for a second that none of the price action over last year ever happened:
Do you think the media would have reported on crypto?
Do you think businesses would have been discussing it at an executive level?
Do you think the SEC would be scrambling to understand and regulate crypto assets?
Do you think some of the worlds smartest minds would be changing careers to blockchain projects?
We at Magnet Capital believe that most of this would not have happened. And, whilst we wish the market was higher than it is now, we see it as significantly healthier for long-term sustainability.
Here are some indicators we are noticing that demonstrate crypto assets are highly valued. Many investors are waiting for the right conditions in which to enter (regulation, custodianship, brokers, an ETF etc.):
Coinbase, the US’s biggest crypto broker, is valued at an estimated US$8bn. This is not the only crypto exchange in the market making waves, Binance reaching a billion dollar valuation in under a year (a unicorn). PE/VC investors are valuing these exchanges at astronomical amounts for one reason or another (we’ll let you guess).
The Intercontinental Exchange (ICE) is set to launch a crypto exchange, Bakkt. Most commonly known as the exchange that runs the NYSE, ICE has partnered with Microsoft, Starbucks and Boston Consulting Group to launch Bakkt. The exchange will be Wall Streets first onramp to crypto and is set to launch in the next 6 months.
Talent, talent, talent. If top talent moves are any indication for big tech trends we are watching crypto VERY closely. Blockchain product and technological developments are luring top academics and business professionals to join tech start-ups. From LinkedIn executives, the Commonwealth Bank CFO, Wall Street capital markets specialists, the NYSE CIO, the list goes on.
Crypto and blockchain courses are exploding at top universities. Academics are creating courses designed for the future and including blockchain and crypto. These courses are highly anticipated and more often than not, oversubscribed. Universities such as MIT, Stanford, Cornell, NYU and Berkeley are launching these courses.
Money talks. Some of the worlds top VC funds are betting huge on crypto. A16z, Sequoia, Bain capital, Union Square Ventures, venrock, Founders Fund, Benchmark Capital etc. have all invested and continue to do so.