Venture capital firms are fleeing from markets yet Binance continues to expand?

December 15, 2018
Chris Wheal

Plummeting cryptocurrency prices this year caused an abundance of venture capital firms (VCs) to flee the market while they can. However, Binance CEO, Changpeng Zhao, seems unfazed saying,

“While many VCs have ‘paused’, we are actually more comfortable investing now.”

venture

So what is Zhao’s secret? According to him, the market’s decline weeded out the weak leaving only the strong behind. 2017’s bull market raised assets across the board, including those lacking proper user bases and companies promoting flawed products. So as the market began to decline, so did the valuation of assets that rose with it in 2017.

Cryptocurrencies’ plunge into the bear market provided a more transparent value of assets. According to an article released by CCN, the previous market crashes resulted in a self-correction of markets, which appears to be happening now. As more assets depart, others are strengthened.

While other VCs are holding out, Binance along with other firms and companies, such as Fidelity and Nasdaq, continue to invest. Although some assets, such as bitcoin, might drop even further, Binance’s continuing interest shows that the path to recovery is around the corner.

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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