Nearly a year after the LUNA/UST crash that sent crypto markets soaring, there finally seems to be a light at the end of the tunnel.
Bitcoin, which accounts for almost half of the global crypto market capitalization, is up 70% since the start of 2023. Other blue chip firms have also done well, with Ethereum and Binance Coin posting gains of around 50 and the 30%, respectively.
Although prices are still far from their all-time highs, trading volume is increasing and market confidence has improved.
We think there are already signs of a thaw this winter, as capital allocation has become more selective. Markets have gradually recovered from last year's lows and the industry continues to attract talent from traditional finance, big tech and the public sector.
โ Ben Roth, Co-Founder and Chief Information Officer, Auros
Here's what Singaporean industry experts had to say about return on investment and consumer interest in the world of cryptocurrencies.
Is it time to be confident in cryptocurrencies?
Although the second half of 2022 was marked by a domino-like collapse of companies, it remained a record year for venture capital (VC) investments in the space. In Singapore, cryptocurrencies were all the buzz at financial and technology events, with conferences like Token2049 drawing thousands of attendees.
Heading into the second quarter of 2023, the industry is looking to return to form. Crypto Expo Asia, which had 5,000 attendees and 50 participating companies in 2022, will land in Singapore for the second year, with the expectation of doubling its workforce.
โAlthough we still have a few months to go before the conference, we have already seen a lot of interest from the industry, with several new additions to the attendee list and this year's attendee list,โ says Crypto Expo Asia Director, Michael Xuan.
That said, this year's key themes are likely to be more grounded and address industry issues that have come to light over the past year.
โAs the industry faces a completely different reality this year, we expect a strong desire for new solutions, trust and transparency to unite both existing and start-up builders and projects,โ Xuan adds.
Fundraising for cryptocurrencies
Given the rapid pace of innovation, cryptocurrencies have been a hotbed of private funding for quite some time. Crowdfunding methods, such as initial coin offerings, boomed between 2016 and 2019, with around US$35 billion raised in that period of time.
Once it died down, due to an increase in scams and failed projects, venture capitalists took over and supplied more than 30 billion dollars only in 2021.
โWe saw funding peak in the second quarter of last year and have been on a downward trend ever since,โ says Ben Roth, co-founder of Auros, a cryptocurrency trading firm with offices in Hong Kong and New York. . โThat being said, despite the current cautious environment, we are starting to see some green shoots in 2023.โ
โIn many ways, this is a much healthier market condition than 2021 and 2022, where all other projects had received funding, leading to the unfortunate outcome of capital misallocation and general inflation of capital growth. industry".
Auros oversaw a $17 million fundraising round in March involving traditional business firms, including Vivienne Court.
Singapore-based DeFi platform DigiFT enjoyed similar success with its pre-Series A fundraiser of $10.5 million. โSophisticated investors continue to be passionate about future-proof solutions that address financial industry pain points, regardless of bull or bear markets,โ says founder Henry Zhang.
Zhang sheds light on a shift in power between investments in decentralized and centralized crypto products. Following the failure of several centralized crypto companies, including FTX and Voyager Digital, it seems that DeFi has a new appeal.
In 2023, we have seen an increase in investments of more than 190% in DeFi compared to the same period last year, while CeFi saw a drop of around 73%. While general crypto sentiments remain bearish, the DeFi industry has seen 65x growth since 2020.
โHenry Zhang, Founder of DigiFT
Singapore's future as a crypto hub
As the Monetary Authority of Singapore (MAS) tightened its reins around crypto regulations in early 2022, some companies were quick to jump ship.
Singapore's status as a crypto center was called into question as exchanges were no longer allowed to advertise to the public and Bitcoin ATMs were banned.
Not long after, however, the fall of LUNA/UST and the collapse of FTX would frame MAS's regulatory stance in a softer light.
Singapore continues to be a bright spot in the world of cryptocurrency and Web3 due to its unique ability to balance blockchain innovation and risk management in what is clearly a promising market.
โ Michael Xuan, Director of Crypto Expo Asia
MAS' consistent stance, which promotes blockchain innovation and deters speculative investment, has allowed companies a sense of stability while operating in the region.
โSingapore, as a financial hub, has been very supportive of blockchain technology and provides a proper legal framework for upcoming Web3-focused companies,โ Zhang explains. โSingapore regulators have also contributed greatly to improving the blockchain industry we see today. They realize its potential and provide favorable conditions for investors.โ
Featured Image Credit: PYMNTS
