PANews: Crypto VC Market Still Adjusting to Post-Pandemic Reality

According to a report from The Block, Multicoin Capital Managing Partner Tushar Jain stated in an interview that the crypto venture capital market has yet to fully adjust to the post-pandemic economic downturn. High valuations and stagnant token prices reflect the challenges facing the crypto industry.

"I think the market still needs to digest some of the hangover. This is true across all venture capital, not just crypto – there was a ton of money that came into the risk asset class in 2021 and 2022, and many people don’t want to just walk away from that yet."

Investors poured $33 billion into crypto startups in 2021, representing 5% of global venture capital across all sectors, according to a report at the time. Several crypto companies, including NFT platform OpenSea and the now-bankrupt lending company BlockFi, reached unicorn status during the peak of the pandemic-era bull market – although Jain says many of those paper valuations were likely inflated. However, this noticeable hangover is not exclusive to the venture capital space. Jain pointed out that many of crypto’s promises have yet to materialize.

"There was too much hype, too much excitement. At the same time, we’ve seen the price really stall out, the value of the main tokens that were issued in the last year has come down considerably, and as I said, there’s uncertainty with the current political environment."