Dot Com Redux
In the last two months, the economic climate, interest rate policy, and geopolitical factors have weighed heavily on the crypto markets. The sharp interest rate hike has caused a recessionary shock to global markets at large, and crypto has been no exception. The perfect storm of war in Europe, runaway inflation, supply shortages, and now interest rate hikes have created a strong risk-off sentiment and triggered massive sell offs in both equities and the crypto market.
Specifically, in the context of crypto, many have compared this crash to the bursting of the dot com bubble in 2000. As markets tighten, the companies and assets with frothy valuations, unsustainable business models, scams, and money chasers are vanishing. Even for large and established businesses, the current market conditions have led to a house cleaning of risky over-leveraged operations as seen in the recent collapse of Terraform Labs, Three Arrows Capital, and Celsius.
Tough markets aside, the long-term outlook for digital assets and blockchain technology has never been better. Strong crypto projects that create real business value are becoming more resilient. Crypto companies and projects with strong fundamentals are using this slow market period to focus and build the next generation of amazing products that will power Web3 and the digital economy of the future.
Some of the most notable digital businesses today (Amazon, Google, Facebook, etc.) either weathered the adversity of the dot com crash and became stronger or were conceived during the crash itself. The same will happen with crypto businesses during this market cycle.
Also, just like the crypto entrepreneurs who are using this time to build exciting new products, our team is focused on using this downturn to create value in our business by developing an asset research, trading, and portfolio management platform. This software will become Mudra’s core engine for asset discovery, market tracking, and trading strategies.
At Mudra Capital, regardless of market conditions, we remain committed to finding and investing in promising digital assets that will become the foundation of our digital economy over the next decade.
Important Upcoming Events
June 24ᵗʰ – Bitcoin futures and options expiry on CME
July 1ˢᵗ – SEC hard deadline to decide on Bitwise Bitcoin ETF (spot-based)
July 6ᵗʰ – SEC hard deadline to decide on Grayscale Bitcoin ETF (spot-based)
What We Are Reading
Crypto: Beyond the Crash & Clutter (Published in Cryptostars by Neeraj Mathur)
Report on Crypto Hedge Funds (Published by PwC)
Floaters (Published in Entrepreneur’s Handbook by Arthur Hayes)
From all of us at team Mudra, we wish you a great summer!