JPMorgan Analysts Raise Concerns Over Crypto VC Funding And Ethereum ETF
JPMorgan analysts, led by Nikolaos Panigirtzoglou, express concern over the subdued flow of venture capital funding into the crypto industry this year despite the recent market resurgence.
They argue that this trend poses a downside risk, as a recovery in crypto VC flows is deemed crucial for sustained market revival. Although venture capital funding in the crypto sector has gained momentum this year, it still trails behind previous years, with $3.2 billion invested year-to-date compared to over $4 billion in the same period last year. However, there is optimism as more venture capital firms are raising new funds amidst the market rebound. For instance, 1kx recently raised $75 million for early-stage crypto startups, while Paradigm is reportedly seeking to raise between $750 million and $850 million for a new fund.
Additionally, Galaxy Digital, Hack VC, and Hivemind Capital are each reportedly raising substantial amounts for their new funds. While VC funding is slowly recovering, crypto hedge funds have seen increased activity this year, with their assets under management estimated at around $20 billion. The analysts also reiterate the possibility of spot Ethereum exchange-traded fund approval by the U.S. Securities and Exchange Commission, though they note fading optimism following an SEC investigation of the Ethereum Foundation.
Clever Robot News Desk 14th April 2024
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