Despite depressed cryptocurrency prices and recent company collapses, one of the key investors behind crypto hedge fund Pantera Capital believes there has never been a better time to start a blockchain company.
As part of January 23 post a year ahead of a number of Pantera Capital executives, Paul Veradittakito, a general partner at the company Panther Capital explained that “on average, people working in the crypto space are more educated and passionate about crypto than in previous cycles.
A strong start to the year! https://t.co/gFe5fUM0gT
— paul.nft (@veradittakit) January 23, 2023
Overall, he said, “We’re seeing a higher percentage of startups coming to market with strong teams—entrepreneurs coming from established crypto startups like Coinbase, larger tech companies like Facebook, Uber, and Square, and legacy financial institutions like JP Morgan and Goldman Sachs.”
The market is still very bearishwith some companies folding and prices are recovering lost ground, but Veradittakit believes it’s still worth being in space. billions invested in space from venture capital firms in the first half of 2022 and added:
“In our experience, bear markets typically represent periods of less noise and distraction from buildings.”
“In addition, we have observed that institutions and businesses are more open than ever to working with blockchain companies to improve their business,” Veradittakit said.
The general partner said he has also seen a shift in volume towards highly regulated exchanges and DeFi-based decentralized exchanges as people seek to protect their assets from bad actors, which could inspire the next generation to enter the crypto space.
“With more control over trust and security, we believe there are opportunities for startups in areas such as self-management, security, insurance and identity,” he said.
Meanwhile, Dan Morehead, CEO of Pantera Capital, expressed a similar bullish view on the crypto space, arguing:
“Despite the lower prices, I think the space is clearly in a much better position than it’s ever been.”
According to Morehead, since 2017, the development infrastructure, which was “virtually non-existent” back then, has improved significantly.
“It’s much easier to write smart contract-based systems now than it was in the previous cycle,” he said.
“Every other area of the stack has improved, whether it’s test suites or automated tools for catching common bugs in smart contracts, to IDE support for Solidity,” Morehead added.
Morehead also points to scalability solutions that allow for lower transaction fees as a big leap forward for the space, as “decentralized exchanges can’t compete with centralized exchanges if the fees are too high.”
There is still a lot of fear, uncertainty and doubt (FUD) floating around the country. after the collapse of FTX and the resulting contagion in 2022, but Morehead believes the industry is still very much alive.
“People said cryptocurrencies were dead, but I believe it was one of the best times to get into the space, start building serious things, and a great time to put capital into cryptocurrencies. It really is darkest before the dawn,” he said.