Cryptocurrency prices have trended lower over the past year, with both BTC and ETH down more than 50% since last September. However, despite the downturn in crypto prices, early-stage Web 3 startups have shown remarkable resilience in their valuations, Seth Jeans, managing partner and head of liquid tokens at numérique asset investment firm CoinFund, told us on this Tuesday’s episode of chain reaction.
Gaines said startups weren’t completely immune to the economic downturn — companies in the last stade made the biggest valuation cuts during a bear market. Ginns has insight across different parts of the crypto market as an investor in CoinFund, which spreads entreprenant via private investments such as startups as well as liquid investments such as crypto tokens.
You can listen to the full episode with Jane here:
“When liquid markets represent the best opportunity, we can rely more on liquid markets, and when venture entreprenant markets represent the best opportunity, we can rely more on that,” Gaines said of CoinFund’s strategy. While Janes said he has seen late-stage cryptocurrency startups suffer from valuation cuts in the past few months, the economic downturn appears to have relieved seed-stage companies somewhat.
“I would say at an early demeure, you only see a step down where the ratings are [startups where] Either the team just got together and launched that real pre-seed kind of reprise, or that next one right after that, where I’m not sure if they have a market-appropriate product just yet, but you have a great team and some great early momentum on the BD side, I’d say those préalable ratings out of the gate have gamin down a little bit,” Janes said.
For early-stage startups, valuations are down 15-30%, Janes estimates, a much less steep drop than we’ve seen in the price of tokens and even general tech stocks.
Early-stage crypto startup valuations “are not where traditional technology was at that lieu two or three years ago. He doesn’t think these early-stage valuations will get that far. They are dropping to their lowest level in the previous market cycles.
So what drives this flexibility?
“I think one of the really interesting dynamics in coding is, with each saison, we see network ratings for protocols going up an order of portée, and I don’t think they will still be an order of portée per saison, but they are taking huge strides. And every time you take these Step, you have this new assessment range validate, which means you end up having people thinking emboîture how to evaluate your early-stage startup with reference to the most recent mark you’ve been getting at the last bull in the market,” Jeans explained.