Pantera Capital’s Paul Veradittakit believes that now is a favorable moment for new entrepreneurs to enter the crypto market.
Despite low cryptocurrency pricing and previous firm failures, one of the primary investors behind crypto hedge fund Pantera Capital believes there has never been a better moment to launch a blockchain company.
Paul Veradittakit, General Partner at Pantera Capital, noted in a Jan. 23 post on the year ahead from a number of executives at Pantera Capital that “on average,” those working in the crypto industry are more knowledgeable and passionate about crypto than in the past cycles.
“We are seeing a growing number of businesses coming to market with good teams,” he said, referring to entrepreneurs from established crypto firms like Coinbase, larger digital organizations like Facebook, Uber, and Square, and traditional banking institutions like J.P. Morgan and Goldman Sachs.
The market is still bearish, with some companies folding and prices recovering lost ground, but Veradittakit believes it’s still a worthwhile time to be in the space, citing billions of dollars invested in the space by venture capital firms in the first half of 2022, and adding, “In our experience, bear markets typically represent a time when there is less noise and distraction from the building.”
“In addition, we’ve found that institutions and organizations are more open than ever before to collaborating with blockchain startups to improve their operations,” Veradittakit said.
The general partner also stated that as consumers try to protect their assets from rogue actors, the volume has shifted toward highly-regulated exchanges and DeFi-based decentralized exchanges, which could motivate the next generation to embrace the crypto field.
“As trust and security become increasingly scrutinized, we feel there is potential for startups in sectors such as self-custody, security, insurance, and identification,” he said.
Meanwhile, Pantera Capital CEO Dan Morehead shared a similar bullish outlook on the crypto market, noting that “despite lower pricing, I think the space is obviously in a far better position than before.”
Morehead claims that developer infrastructure, which was “practically non-existent back then,” has improved considerably since 2017.
“Writing smart contract-based systems is just much much easier now than it was in the prior cycle,” he said.
“Every other element of the stack has improved, whether it’s test suites or automated tools to catch common errors in smart contracts, to having Solidity IDE support,” Morehead continued.
Morehead also sees scaling solutions that enable lower transaction fees as a significant advancement for the market, stating that “decentralized exchanges can’t compete with centralized exchanges if fees are too high.”
There is still a lot of fear, uncertainty, and doubt (FUD) lingering around in the aftermath of FTX’s demise and the subsequent contagion in 2022, but Morehead feels the industry is still very much alive.
“People were saying, ‘crypto is dead’, yet I feel it was one of the best times to get in the sector, start building significant stuff, and a terrific moment to commit capital into crypto. “It is indeed darkest before dawn,” he observed.
