Crypto Research

ANNUAL OUTLOOK RECAP Yesterday, we held our annual outlook call, in which we discussed the carnage of 2022 and reasons to be optimistic about 2023. Below are some highlights, but we invite you to review the entire deck and watch the webinar. BOTTOM IS IN FOR THE MAJORS We think that the majors have seen their absolute cyclical lows. This rationale is supported by (1) the nature, magnitude, and duration...

Despite a cold start in the first week of 2023, funding has ramped back up, increasing from just $7M in the first week of 2023 to $65M and $186M in the last two weeks, respectively. The majority of this funding came from Web3 and NFTs, which accounted for roughly $80M each week. There were also four Web3 and NFT related venture funds the past two weeks, totaling a massive $1.85B...

EXECUTIVE SUMMARY Click Here for the full report.Since late 2021, crypto markets have struggled in the face of a challenging macroeconomic background highlighted by rampant inflation and geopolitical conflict. Asset price drawdowns were exacerbated by a violent unwind of unhealthy leverage in the space, which revealed outright fraudulent behavior among some of the industry's most prominent figures. Despite these headwinds, crypto VC funding remained strong in 2022 and set a...

CARNAGE GIVES WAY TO INDIFFERENCE There are few cohorts of people more excited to turn the page to a new year than crypto investors. After nearly 12 months of unwinding leverage, we have finally reached a point in the cycle where indifference has crept into the market, as demonstrated by the continued decline in volumes and realized volatilities. Aggregated ETH volume is the best proxy for trading activity in crypto....

Crypto funding is off to a slow start in 2023, with only five deals this week and a total of ~$7M in funding (two deals did not report the funding amount, so the actual number is a bit higher). It’s worth noting that this is in large part due to a lack of deal activity around the holidays – last week’s funding was also low at just $1M of funding....

ONTO NEXT YEAR Our last weekly strategy note of the year is going to be a brief one. I want to thank everyone for turning to us for timely and actionable research on crypto throughout this year. It was undoubtedly a trying time for the industry. We witnessed a period of reckoning that will leave the space better off over the long term. We will be back in the new...

Funding dropped considerably this week, falling to $26m from $503 million last week. Infrastructure deals led funding with 42% of the capital raised. All the fundraising this week was in the seed round stage. The largest deal raised was a $7.8 million seed round by Revel, an NFT minting and trading marketplace. While NFT volume has fallen off a cliff since the high levels of activity seen late last year,...

DCG UPDATE _LEVERAGE UNWIND RECAP_ Clearly, the most challenging part of analyzing cryptoassets this year has been the opaque parts – the lending, borrowing, trading, and siphoning of assets that have occurred off-chain. This year, we have seen a deleveraging event throughout the global crypto market spurred on by the centralized elements of crypto. First, we saw the de-pegging of UST and the incineration of $50 billion in market value...

Funding saw a notable increase this week, rising to $503 million from $73 million last week. CeFi and Infrastructure made up the large majority of capital raised, representing 60% and 31%, respectively. The largest deal this week was a $300 million Series C deal raised by Amber Group. Amber Group is a digital asset trading platform, and they raised capital in order to increase the company’s health following the collapse...

Funding saw a sharp decrease this week as we progress through the final month of the year. This week's fundraising total was $57 million compared to $198 million last week. DeFi was the bright spot in the lackluster week, representing 37% of all fundraising. A trend is emerging around decentralized trading platforms. Perennial, a cash-settled derivatives protocol, and Panoptic, a perpetual options protocol, represented two of the three DeFi deals...