Week Ahead: Despite a nine-week decline, VCs showed conviction, BTC grabbed a 44% share of the crypto market.
BTC fell for a ninth consecutive week, on track for a more than 20% decline in May. BTC is trading in a tight range under the $30K price level. BTC remains the top performer grabbing 44% market share as altcoin holders rebalance their portfolios. ETH has struggled to gain traction and is down more than 35% this month, with signs volume is down close to 80%, impacted by lower NFT demand with hopes of a rebound pinned on the August merge. S&P and Nasdaq broke their seven-week streak of declines. Bitcoin prices had correlated with stocks, but last week marked a decoupling of the trend as crypto failed to gain momentum as risk appetite made a comeback.
US stocks were boosted by the narrative Fed to pause rate hikes gaining traction. Jobs data in the US to be scanned for inflationary clues this Memorial Day shortened week. If inflation starts to cool, the Fed would reduce pressure on riskier assets, with the end of 2022 a possible timeline.
JP Morgan noted there is an upside for cryptocurrencies, with BTC showing favorable signals as the firm forecasts the digital currency is underpriced by 28%. According to the bank, crypto assets are now the preferred alternative assets displacing real estate.
Despite the setback for crypto prices, some VCs are showing conviction and searching for lucrative investments.
Andreessen Horowitz raised a $4.5B crypto fund, the largest on record, with $3B going to venture investment and $1.5B to seed investments. The VC firm now has $7.6B dedicated to digital assets. FTX said recent fundraising rounds (around $2B) could fuel the acquisition of stakes in other companies in the crypto space. Ex-Binance executives launched $100M with a focus on Latin America and Africa. Blockchain infrastructure startup raised $100M at an $8B valuation six months after a series C $50M investment.
Binance announced it had registered in Italy following the news of French registration with Switzerland, Sweden, Spain, Netherlands, Portugal, and Austria, the next countries targeted for expansion. The Russian government considers digital currency transactions for international payments despite Central Bank opposition.
