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The economic landscape may look dire at the moment, but it is unlikely to affect the development of blockchain, according to Pantera Capital CEO Dan Morehead. In an interview for Real Vision on Thursday, the venture capitalist said he believes blockchain technology will work based on its own fundamentals, regardless of the conditions indicated by traditional risk metrics:

“Like anything disruptive, like Apple or Amazon stocks, there are short periods of time where it correlates with the S&P 500 or whatever risk metric you want to use. But over the last 20 years it’s been doing its own thing and that’s what I think will happen with blockchain in the next ten years or whatever it’s going to do its own thing based on its own fundamentals.”

During the first half of this year, Pantera Capital raised approximately $1.3 billion in capital for its blockchain fund, with a particular focus on scalability, DeFi and gaming projects. “We’ve been focused on DeFi for the last few years, it’s building a parallel financial system. The game is online now and we have a couple hundred million people using the blockchain. There are a lot of really cool game projects, and there are still many opportunities in the scalability sector,” he added.

The long-term optimism, however, contrasts with the actual decline in venture capital in the industry. August saw the fourth consecutive year monthly decrease in capital at $1.36 billion, according to data from Cointelegraph Research. Inflows are down 31.3% from July’s $1.98 billion, with 101 deals closed in August, on an average capital investment of $14.3 million, a decline of 10.1 % compared to July.

The crypto winter was expected to spur consolidation in the sector, but recent figures from Crunchbase revealed that only four deals with VC-backed crypto companies were completed in the US this quarter – a setback from 16 deals in the first quarter of the year.

Sandeep Nailwal, the managing partner of Symbolic Capital, explained that the bear market has pushed back even the big players in the industry:

“Everyone expected M&A to take off in crypto as we headed into this bear market, but we haven’t seen that happen yet. I think the main reason for that is that the The downturn hit the industry so quickly and so hard that even large companies that marketed themselves as aggressive acquirers were so shocked by the crash that they had to make sure their own balance sheets were in order before looking elsewhere. for growth.”

The crypto exchange FTX does not seem to be affected by this problem. The company has reportedly entered into talks with investors to raise $1 billion in new funds to fund additional acquisitions during the bear market. “We’ve seen valuations fall from pre-summer highs and you have to think there’s a lot of buyers, especially in the CeFi space, looking at these low valuations and thinking it’s all on sale right now.. FTX has certainly felt that and they’ve been extremely careful in how they’ve taken advantage of these market conditions to fuel their growth,” Nailwal said.

FTX’s investment arm announced earlier this month that it had took a 30% stake in asset management firm SkyBridge Capital for an undisclosed amount, and Canadian crypto platform Bitvo was bought by FTX in June.

In the opposite direction, e-commerce firm Bolt halted plans to acquire Wyre, a crypto and payments infrastructure company, after announcing a $1.5 billion deal in April. A few weeks earlier, cryptocurrency investment firm Galaxy Digital decided to abandon the acquisition of digital asset custodian BitGo, citing breach of contract.

BitGo filed a lawsuit against the crypto investment firm for terminating the acquisition, seeking more than $100 million in damages and accusing Galaxy of “wrongful repudiation” and “intentional breach” of its acquisition agreement.