In a volatile market like crypto, the old Wall Street adage that says, “Bulls make money, bears make money, but pigs get slaughtered” still makes total sense. Basically, it means you pretty much lose every time you remain undecided on whether you want to be a market bull or a bear. Just like there is no middle ground while investing in stocks and securities, the cryptocurrency market is unforgiving to those who become too greedy to decide where they stand. Simply put, you are either in it for the long run or the short run.
This cannot be pointed out more clearly than the crypto boom that happened late last year and early 2018 when Bitcoin traded at a price as high as $20,000 per coin. Say what you may, but both bullish and bear investors made money at the time. However, a good number of retail investors who had just caught the hype hoped the market would go much higher and therefore they paid a heavy price for their greed or lack of sufficient market knowledge.
The market has been crashing
Since the beginning of the year, the crypto market has been on a steady decline losing over 50 percent of its December 2017 peak value in the first quarter of 2018. As a result, traders, investors, and market speculators have been concerned with trying to figure out when and if the bull market will recover.
According to Bill Barhydt, the CEO crypto trading platform by name of Abra, the biggest contributor to the market decline is the fact that the euphoria that brought about the bullish rally at the start of 2018 has “come down to earth” as a result of a market mostly driven by retail investors.
However, while retail investors exit the market due to a long-lasting bear trend and a series of violently volatile market movements, institutional investors are starting to pay attention and even investing in crypto.
The launch of an ‘all-weather’ crypto venture fund
Cue a 16z crypto fund (a $300 million venture fund that recently announced the launch of its venture capital firm that will focus on crypto projects). In fact, a16z crypto fund is coming into a market that is not only on a bear trend but stands a chance of declining much further.
According to Spencer Bogart, a partner at Blockchain capital, the crypto market’s liquid providers are looking to sell due to the decline by over 50 percent since January. As a result, Bogart believes that prices could go “artificially lower”.
However, as the overall market struggled to find footing in the first quilter of 2018, institutional investors like a16z crypto fund are doubling down with a dedication to crypto companies. In fact, according to Chris Dixon, a general partner at a16zcrypto, “We’ve experienced ups and downs in the cryptocurrency market, and expect there will be many more,” however he continued to mention that “There’s potential in the technology, and some of the downturns can be the best investments.”
A16zcrypto is an “all-weather” fund that boasts of over 5 years of long-term investment in crypto’s early stage coins, later stage networks and tokens. The company is set to be a consistent and aggressive investor over time no matter the market conditions. Dixon further told CNBC that “there are wild fluctuations in the price, and we see that as an opportunity”
Leading the firm will be Katie Haun (a former U.S Department of Justice Prosecutor) who has experience helping crypto startups navigate the rough and tough tides of regulation in the US. Apart from being a board of director at Coinbase, she also worked on Silk Road’s high profile crypto related cases in 2015.
In closing
The crypto market is still at its nascent years. As a result, institutional investment firms like a16zcrypto are not only changing the trend from a market dominated by retail investors but also providing sustainable support that will eventually enable crypto to solve future and present problems in the world.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.
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