Main topic: Funding disparity for Black founders in the U.S.
Key points:
- Black founders raised $212 million out of $29 billion in Q2 2023, representing 0.71% of the capital allocated to U.S. founders.
- In Q2 2022, Black founders raised $602 million out of $62 billion, or 0.97% of the capital allocated.
- In H1 2023, Black founders raised around $565 million out of $75 billion, which is 0.75% of all capital raised in the U.S. so far this year.
- Funding to Black founders has been on a steady decline since Q1 2022.
- Black founders have never raised more than 2% of capital in any given quarter.
- The decline in funding suggests waning investor interest, despite momentum in 2020 driven by the Black Lives Matter movement.
- There are two different worlds within the venture ecosystem: the old guard with billions of assets under management and the new guard of emerging fund managers, many of whom are diverse but lack significant funds.
- Crypto payment startup MoonPay raised $555 million in a funding round, valuing the company at $3.4 billion.
- CEO Ivan Soto-Wright and other executives were able to cash out $150 million of their own stock.
- However, rank-and-file employees were not given the promised equity options due to a blackout period for issuing new options.
- MoonPay's failure to issue options at a low strike price before talks with investors hurt its employees' potential upside.
- The company's business was also affected by the fading enthusiasm for buying crypto.
The recent crash in the crypto market has significantly impacted memecoins, resulting in a 9% drop in total market capitalization and raising concerns about a broader bear market; however, the underperformance of memecoins during such periods is not necessarily indicative of their long-term performance compared to the wider crypto market.
The cryptocurrency market has experienced a notable downturn, with the total market capitalization falling by 10% and triggering significant liquidations on futures contracts, attributed to factors such as rising interest rates, inflation, delays in approving a Bitcoin exchange-traded fund (ETF), financial difficulties within the Digital Currency Group (DCG), regulatory tightening, and a strengthening US dollar.
Cryptocurrencies, including Bitcoin and Ethereum, experienced a rise in value as investors anticipated the Federal Reserve's annual meeting and Bitcoin attempted to reach $30,000.
In July, capital inflows from venture capitalists in the crypto sector decreased by 10.26%, with $700 million raised, as macroeconomic conditions and geopolitical events continued to impact investment decisions, although some notable outliers, such as Polychain Capital and CoinFund, launched new funds totaling millions of dollars, and the potential approval of spot Bitcoin exchange-traded funds (ETFs) in the U.S. could bring renewed attention and capital into the industry. Infrastructure and Web3 sectors received the most capital inflows, while overall investor activity in the blockchain industry remained low, suggesting a slow return to a steady upward trend.
Head of Research at FS Insight, Tom Lee, predicts that Bitcoin's network value and scarcity could push its price over $200,000, while other experts, including Ark Invest CEO Cathie Wood, also foresee significant growth for the cryptocurrency. Lee highlights Bitcoin's resilience and regulatory scrutiny as well as interest from traditional financial giants such as BlackRock and Citadel.
Cryptocurrencies experienced a significant drop ahead of Federal Reserve Chair Jerome Powell's Jackson Hole Symposium speech, while the global crypto market capitalization decreased by 0.83% in the last day.
Five crypto and blockchain-based companies raised a total of $24 million this week, with notable fundraises including $13 million for bitcoin mining company Nodal Power and $5 million for crypto lender Maple Finance.
Institutional investors hold the power to determine the success or failure of cryptocurrencies, as the novel technology and uncertain regulation have diminished interest and confidence, resulting in a significant decline in value.
ARK Invest CEO Cathie Wood predicts that the market capitalization of cryptocurrencies will increase by over 2,100% in less than seven years, driven by institutional investment and the potential approval of a Bitcoin exchange-traded fund (ETF), with the total crypto market cap potentially reaching $25 trillion by 2030.
Bitcoin pulled back from its all-time high above $28,000 as investors analyzed the implications of Grayscale's court victory against the SEC, with the cryptocurrency dropping 2% to $27,240, while Ether decreased 1.7% to just above $1,700, leading to a decline in the broader crypto market.
Crypto prices, including bitcoin and major tokens, experienced a decline due to profit-taking and a general risk-off environment, erasing gains from Grayscale's court victory, with prices weakening ahead of the U.S. jobs report release.
Bitcoin's price dropped below $26,000 as the approval of a Bitcoin ETF was further delayed by the SEC, reversing the bullish gains from the Grayscale court decision earlier in the week. The crypto market also experienced a decline, with Ethereum's price going down by 3.5% and the overall market cap losing $11.2 billion. However, Maker and Toncoin managed to resist the bearish trend with positive gains. The global macroeconomic landscape also added to the uncertainty, as key economic data raised doubts about a potential interest rate hike.
Bitcoin and crypto could experience significant growth in the next few months, with September expected to be a particularly eventful period, including the potential impact of U.S. bitcoin ETF filings and China declaring crypto as "legal property and protected by law."
Bitcoin and other cryptocurrencies experience a decline as the Securities and Exchange Commission slows down the decision process for crypto exchange-traded funds.
Crypto analyst 'Sunnydecree' highlighted the paradoxical behavior of people being hesitant to buy Bitcoin at $26,000, despite major asset managers like BlackRock seeking to enter the crypto space and the potential for future price increases.
Bitcoin (BTC) has remained stagnant below $26,000, with investors waiting for further developments in the cryptocurrency market and the wider economy, while Ether (ETH) is expected to outperform BTC in September and October due to the potential approval of the first ether ETF in mid-October. Additionally, SOMA Finance plans to sell tokens that represent a financial interest, addressing the criticism that crypto tokens lack equity or debt claims. Binance continues to dominate the crypto market as the leading exchange.
Global venture funding in August 2023 reached $22 billion, a 19% increase from the previous month but a 16% decrease from July 2022, with late-stage funding experiencing a year-over-year increase for the first time in 18 months, according to Crunchbase data. However, early-stage funding nearly halved and seed funding was down by around one-third compared to the previous year, while deal counts in August 2023 were almost half of the previous year. The largest fundings were in transportation, sustainability, and biotechnology, and the hope for the startup funding landscape lies in upcoming IPOs of well-funded venture-backed companies.
Despite a decrease in venture capital investments in June, new crypto projects are still attracting funding, including Orbital's $6.4 million raise for expanding blockchain payment infrastructure, unshETH's $3.3 million seed round for decentralized finance solutions, ZTX's $13 million funding for Web3 infrastructure development, Stroom Network's $3.5 million raise for Bitcoin staking, and Fxhash's $5 million funding for its digital art platform.
Aggregate crypto spot and derivatives trading volume declined by 11.5% to $2.09 trillion in August, with low spot-trading volume and fluctuations in derivatives open interest indicating a speculation-driven market, while Binance maintained its top position despite a decrease in market share.
Nvidia's dominance in the computer chip market for artificial intelligence has led to a significant decline in venture funding for potential rivals, with the number of U.S. deals dropping by 80% from last year. The high cost of developing competing chips coupled with Nvidia's strong position has made investors wary, resulting in a pullback in investment.
Venture capital funding has significantly declined, with global funding nearly half of what it was last year, leading to a shift towards AI funds; however, the overall VC market is still far from its peak in 2021-2022, as higher interest rates and supply chain shortages create an unfavorable environment for investors.
Crypto markets experienced a decline as FTX's potential selling pressure raised concerns, causing Bitcoin to fall below $25,000 for the first time since mid-June, and altcoins to underperform, particularly Solana (SOL).
Institutional investors are less optimistic about cryptocurrency due to a strong dollar and regulatory concerns, leading to consecutive weeks of outflows totaling nearly $60 million, according to CoinShares.
August saw the crypto markets experience a downturn, with Bitcoin and Ether losing significant value due to liquidations on the derivatives market, while venture capital investment in the blockchain industry hit a new low and derivatives drove negative sentiment for Bitcoin.
The crypto industry experienced significant capital outflows of $55 billion in August, leading to a liquidity crunch that allows isolated events to have a greater impact on prices and market movements, according to an analysis from Bitfinex.
The use of crypto wallets is predicted to grow by $686 million by 2026, driven by the expansion of wireless networks, online transactions, and evolving regulations, according to market research firm Technavio, with the COVID-19 pandemic and the rise of play-to-earn games contributing to the increase in wallet creation. However, new regulations aimed at regulating cryptocurrencies could potentially slow down adoption.
Crypto funds have experienced outflows of $455 million over the past nine weeks, with bitcoin accounting for 85% of the outflows, as investors continue to withdraw funds despite recent legal victories for the industry.
Bitcoin and other cryptocurrencies experienced a decline after the Federal Reserve decided not to raise interest rates, suggesting that significant gains may not be anticipated in the near future.
Ark Invest's recent report highlights the recovery of Bitcoin's realized capitalization, the decline in liquidity and trading volumes, the recent increase in volatility, and the optimistic long-term outlook for the cryptocurrency.
Deep-pocketed crypto investors have moved over $660 million worth of Bitcoin, Ethereum, and Chainlink as Bitcoin's price drops below $27,000.
