After a rough Q2 that saw massive crypto market drawdowns, forced liquidations and bankruptcies in the face of unprecedented macro headwinds, Russia-Ukraine War and sharp federal interest rate rises, things are finally beginning to stabilize in the cryptoverse. Larger crypto players, like FTX and Binance, have been coming to bailout struggling companies and the contagion seems to have been contained for now. During the recent crypto crash, major decentralized finance projects like Aave, Maker and Compound withstood the test and performed predictably as per protocol design, while most of the struggling entities happened to be centralized finance companies that took on unsustainable risks and leverage.
In July, the market started showing signs of recovery for digital assets, as all crypto sectors posted gains exceeding 8% over the month. Bitcoin has remained positively correlated with both the Nasdaq and the S&P 500 equity indices.
It’s probably too early to tell whether the crypto winter is retreating and making way for a bullish period, but early signs of a market stabilization and recovery are being seen across the board as founders and entrepreneurs keep building through this market cycle.
How the overall crypto market does in the mid-term will mostly depend on macro-economic conditions and major industry events, most prominent being the Ethereum ‘merge’ and migration to Proof of Stake (PoS) that is set to happen in September.
At Mudra Capital, we are actively following all the market movements and news to ensure the right allocation of assets in our three funds.
What’s Happening at Mudra?
You may have noticed the new logo and branding for this newsletter. As the markets recover from turmoil, our team has been working heads down to update our brand identity to reflect the core value propositions of Mudra more clearly – deep experience, focus on crypto research, strategic investing, and investor friendly approach.
In July, we also finalized a business relationship with Coinbase Institutional, and now our funds have the benefit of Coinbase Prime custody and trading.
We have also entered a partnership with Parallel Markets to provide accredited investor verification as we gear up for 506(c) registration with the Securities and Exchange Commission.
August 27, 2022 – our co-founder Neeraj Mathur is speaking about ‘The Future of Digital Assets’ at IIT Bay Area Conference in Santa Clara. We also have a booth at the event. If you’re in the area, please drop by to meet Neeraj and our CEO, Pawan Mishra, and our Investment Strategist, Sukesh Pai.
September 19, 2022 – Ethereum moves from Proof of Work (PoW) to Proof of Stake (PoS). This event is very highly anticipated by the crypto community.