DFG bets on crypto startups despite bear market

DFG bets on crypto startups despite bear market

After the biggest VC boom in crypto history last year, venture capital funding in the industry fell 38% between April and May of this year, according to Dove Metrics.

This came on the heels of the Terra-induced crypto crash that spiraled the industry into a bear market. But even though this crypto crash has seen prices fall just as hard as any other crash, things are different this time around. It seems no serious observer is under any illusion that crypto or DeFi are going away any time soon. 

Digital Finance Group (DFG), a global blockchain and cryptocurrency investment firm, recognizes that, and is actively working to prepare blockchain and Web 3.0 startups for the next bull cycle. Founded by CEO James Wo, DFG manages more than $1 billion assets, with a particular emphasis on the Polkadot ecosystem such as Astar, Acala, Efinity, Moonbeam, and Unique. The firm has grown to become among the largest holders of Bitcoin, Avalanche, Polkadot, and Near tokens in Asia.

Out of the many proof-of-stake (POS) networks, Wo sees Polkadot as fair, secure, and resilient. Polkadot’s heterogeneous multi-chain network allows for developers to create new projects more easily and affordably, and with its cross-chain interoperability, Polkadot can communicate with external networks such as Bitcoin and Ethereum.

Beyond just focusing on Polkadot as a POS ecosystem, it’s proof-of-stake that DFG is betting on as the future of blockchain. Another POS network the fund has its eye on is Cosmos, the energy-efficient blockchain enabling blockchains to transfer value with each other through IBC and Peg-Zones, while letting them retain their sovereignty.

DFG maintains a diversity of investments

More than just establishing the Venture Equity Fund for investing in CeFi service providers, DFG has established Crypto Fund and the Polkadot Ecosystem Fund. The idea is to support projects that are innovative enough to prosper with the  adequate funding.  Currently, the fund has its eye on investing in up-and-coming infrastructure providers, such as ChainSafe and CypherMod.

Although crypto startups are some of the most high risk projects in which to invest, they can also reap the highest rewards. Bitcoin plunged to a value of one penny right after hitting $1.00 a few days prior in 2011, losing 99% of its value in a few days. Yet, Bitcoin’s price rose again to $29.60 within three months, a 2,960% increase. Throughout the bear and bull cycles of the market, Bitcoin peaked at $67,566.83 in November 2021. Ethereum’s success has fluctuated over the years as well. Still, with the help of venture capital investments including those of DFG’s, Ethereum currently has over 90% of the NFT market and its native token remains the most well-known altcoin.

Optimism in the crypto space remains

Regardless of crypto’s exciting surges, the crashes are ever-present, and the industry's volatility remains strong. Within the past few months of 2022, Bitcoin and Ethereum have both dropped more than 50% from their all-time highs in 2021. Still, despite harsh market conditions, investors’ interest in crypto persists.

DFG is optimistic about the mainstream potential of the crypto market. Especially in the Asian region, the fund hopes local authorities will soon gain a deeper understanding of the blockchain industry so that VC’s mainstream acceptance of the crypto market will be possible. The bear market won’t last forever, and DFG is building the foundation for a successful bull run in the months or years to come.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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