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Funding winter or smart investments? 👀
The web3 VC funding down ∼80% year-over-year, but deals up by ∼20%. The rat poison portfolio vs Warren Buffet. $100k for BTC by 2024 end? Crypto winter can take a toll on hodlers’ mental health.
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It a strange time to be a Web3 startup.
The cheques have shrunk, but the interest hasn't.
What do we learn?
The money has got smarter and the smart money is making measured bets. Like a spread that is hedged and limits the loss. It is also the time to BUIDL.
Venture funding down. Understandable considering the overall financial market sentiments and how economies world over are shaping up.
Crunchbase has some interesting numbers
Funding has tanked 82% year-over-year (YoY).
🔽 from $9.1 Billion in Q1 2022 to $1.7 Billion in Q1 2023.
Lowest amount of Web3 startup funding since the $1.1 Billion of Q4 2020
333 deals (between VCs and Web3 startups) recorded in Q1 2023 — YoY decline of roughly 33%.
VC-backed startups with around $800 Million invested and blockchain startups raised about $1.2 Billion — both the lowest since 2020.
Galaxy Research studied the data of past 12 months (all crypto companies):
$2.4 billion raised by all crypto firms in Q1 2023, an 80% decline from the $13 billion recorded in Q1 2022.
VC crypto deals increased by around 20%
Plus, Bitcoin has outperformed Berkshire Hathaway by 320,000% since its launch in 2009. Who would have thought that rat poison could be so profitable? Not Warren Buffett
Why not sponsor us, eh?
TTD MTM 📊
Warren Buffett might have been a bit too quick to dismiss the mighty Bitcoin. In fact, if he had added just a teeny tiny 2.5% of Bitcoin to his "rat poison" portfolio (a mix of Berkshire Hathaway, Microsoft, JPMorgan, and BlackRock stocks), he could have seen a 20% increase in returns.
Even during a bear market, Bitcoin could have offset losses by up to 10%. Alpha Zeta, an independent market analyst, has shown that despite Bitcoin's reputation for volatility, it actually has a very low correlation with the stocks in Buffett's portfolio.
Sure, Buffett might call Bitcoin a "gambling token," but it's hard to argue with its track record. Since its launch in 2009, Bitcoin has outperformed Berkshire Hathaway's portfolio by a staggering 320,000%.
That's right, you heard me - three hundred and twenty THOUSAND percent.
So next time someone tells you that Bitcoin is just a passing fad, you can show them this.
TTD Numbers 🔢
The price Bitcoin could reach by the end of 2024.
What? Standard Chartered thinks the so-called "crypto winter" is over.
Longer-term forecasts are often inaccurate. A Citi analyst said in November 2020 that bitcoin could climb as high as $318,000 by the end of 2022. It closed last year down about 65% at $16,500.
TTD Health 👩⚕️
The market's been all over the place, leaving traders, developers, and community members feeling like they're on a wild ride in a theme park that never seems to close.
But here's the thing, it's not just our wallets that are taking a hit - it's our mental health too! The stress and anxiety that comes with investing in such a high-risk industry can really take a toll.
That's why mental health pro Elizabeth Sterbenz and wellness guru Srikumar Rao suggest some solid tips to keep our heads on straight.
Little TDLR: First up, they think the key to maintaining good mental health in the crypto industry is to accept that winning is not a requirement for happiness.
Sterbenz says to seek out a good financial advisor to help guide us through the ups and downs of the market. Having someone on our side to help ease the stress and provide some much-needed guidance is key.
And Rao reminds us that cryptocurrency has no intrinsic value, but that doesn't mean we should throw in the towel. Instead, he suggests anchoring ourselves in the idea that we're involved in crypto because it's where our path is taking us. Embracing this mindset can help us find purpose and direction in this wild, unpredictable market.
TTD Mislead 😬
Don't trust TikTok.
When it comes to crypto (or anything you put your money into).
According to DaapGambl, over 30% of the crypto videos on TikTok are misleading! crypto influencers on TikTok are spreading unvetted misinformation about Bitcoin and other cryptocurrencies.
And some of these influencers are trying to convince their viewers to invest their hard-earned money into crypto projects that will lose them money! Yikes!
The famous “#cryptok” hastag were used by these influencers and around 1,161 such TikTok videos and found that more than one in three were misleading.
47% of the crypto TikTok creators were found to be trying to make money by pushing services.
Even celebrities like Kim Kardashian, Jake Paul, and Soulja Boy have been accused of promoting cryptocurrencies without disclosing payments they received. And while crypto influencers may have a smaller reach than mainstream celebrities, the potential financial risk for unwary investors remains high.
TTD Surfer 🏄
The Canadian musician Grimes willing to ‘split 50% royalties’ with AI-generated music, took to Twitter to voice her support.
Bored Apes, CryptoPunks fall below $100K as blue chip NFT projects are losing value across NFT marketplaces, trading at nearly two-year lows.
SEC wins $2.8 Million in suit against Hydrogen Technology Corp. and its former CEO over alleged crypto token price manipulation.
The Bank of Korea (BoK) will be given the right to investigate local crypto firms, to access transaction data from exchanges operating in the country.
The Reserve Bank of Zimbabwe plans to introduce a gold-backed digital currency as legal tender in a bid to stabilise its local currency.
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The Token Dispatch is a daily newsletter that takes you on a 4-5 minute drive through the wild west of the Crypto World. Daily in your email inbox @13:00 GMT. Almost always.