🤯 $2 trillion crypto market cap wipeout + SEC crypto trading crackdown
What the crypto hangover means for startups and investors
🤯 The crypto winter is still unfolding as crypto’s total market cap plunged to $1 trillion from its November $3 trillion high. Crypto market cap is calculated as the number of tokens multiplied by each one’s latest price. One might argue that this was never an effective measure to assess crypto’s economic value.
Nonetheless, a $2 trillion (2/3) wipe out is “significant enough” to reliably indicate the directionality of the market.
🤯 As it was not enough for the crypto world, the U.S. Securities and Exchange Commission is now actively probing crypto trading. Having taken the position that many tokens are actually securities, the SEC assesses that these tokens now fall under its purview. This approach will drastically change the way the industry operates.
The multiplication of the lawsuits for unregistered securities offering and insider trading showcases the impact that this view will have on the industry.
🤯 The increase in private litigation centering on securities will have serious repercussions across the board.
👉 Valuation reset and exit optionality
👉 Legal costs and fines
👉 Reputational damage
👉 Founders, executives and employees risks
👉 Timing
🤯 With these challenges in mind, our recommendations are threefold.
👉 Suspend investments in unregistered tokens
👉 Perform extreme due diligence for any potential crypto startup investments
👉 Nuclear-proof your current investments in crypto startups and in your crypto startup
Subscribe to get full details!
💸 For an investment of $19/month or $190/year, you can get full access to valuable insights, every week, on how to increase your financial returns. A pretty smart investment decision! 💸
Keep reading with a 7-day free trial
Subscribe to Peggy Van de Plassche to keep reading this post and get 7 days of free access to the full post archives.