Cryptocurrencies have mostly become a game of highly capitalized institutional investors known as venture capitalists (VC), often described as a “predatory” dynamic. As the Securities and Exchange Commission (SEC) continues with the cryptocurrency industry crackdown, VC-funded projects could offer increased risks.
In an exclusive report, DL News obtained confidential documents showing that the SEC is targeting three crypto venture capitalists. The report, however, could not reveal who the agency was targeting, sounding alarms to the entire market.
Within this context, Finbold retrieved data from CryptoRank to identify some of the cryptocurrencies with higher capitalization and VC funding. As things develop, investors should avoid these projects in the short term until more information comes to the surface.
Private funding rounds, filtered by chains, ordered by “Raise.” Source: CryptoRank
Strong demand could overcome high supply pressures
Nevertheless, it is possible that this recent development does not directly affect the price of these cryptocurrencies. Even when facing higher selling pressure on the supply side, accruing enough demand on the buying side could sustain good performance.
For example, Solana has grown to be one of the best performers in this cycle, and Raoul Pal believes Sui could be the next big mover following SOL’s leadership.
On the other hand, Justin Bons named MultiversX (EGLD) as the “technological Holy Grail of crypto.” Interestingly, EGLD had ten times less private funding than its mentioned competitors, holding a lower capitalization.
Investors and traders, however, must understand the risks and market dynamics while speculating in this VC-dominated environment.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
