According to Robert Le, a senior analyst of Pitchbook, a venture capital research company,MoneyIt will trigger a huge wave of financing transactions that will engulf the entire encrypted money industry. The $2 billion investment provided by the Abu Dhabi government-affiliated MGX coincided with the venture capitalists’ projections for 2025: Risk investments in the industry will double to $18 billion this year.
This huge investment could also lead to the acceleration of market access for other promising funds. “The $2 billion financing of coins paved the way for larger-scale transactions”, Robert Lew told DL News, “which brought the total amount raised in the first quarter to $4.7 billion”. He reiterated his earlier prediction that risk investors would invest about $18 billion in the industry this year.
Although the return of former United States President Donald Trump to the White House had led to global market turbulence, risk investors remained optimistic. As a result of his tariff policy uncertainty, a Canadian politician described it as “psychological drama”. Since Trump took office, the value of the entire encrypted currency market has declined by more than 20 per cent, and bitcoin has fallen by 25 per cent from its peak of $108,000. The wider stock market was also not spared, with the market value of Tesla, led by Elon Mask, being reduced by 50 per cent.
However, as Robert Lew said, investors remain very active. Not only did Trump signal the end of the Biden era of encrypted currency pressure, many venture investors had billions of dollars to wait for deployment. For example, the investment giant Andressen Horowitz has yet to draw on its $4.5 billion fund raised in 2022. Another sign of upcoming large transactions is that Haun Ventures of Kathryn Haun is launching a $1 billion fund on the market, “it will only go to late-stage companies”.
Nevertheless, the memory of the market collapse of 2022 has not completely faded. Many of the projects that were supported in the last round of cattle markets with white papers alone saw their investments evaporate as markets declined. After the boom of 2021, risk investors became more cautious. Their due diligence on the project was made more rigorous to avoid a repetition.