Yat Siu, CEO of Animoca Brands, said that the global cryptocurrency space has been uneven, with Web3 startups flourishing in the Middle East and Asia, while North American cryptocurrency entrepreneurs face challenges under tough macroeconomic and regulatory conditions.
In an interview with Cointelegraph at the Collision conference in Toronto, Siu highlighted key differences between the global cryptocurrency business environment, emphasizing that it’s not “as bad as it sounds.”
He said that Web3 startups can still raise funds from venture capital firms, but the current situation of rising interest rates around the world and falling prices of encrypted assets has raised the bar for newcomers.
“Obviously, valuations have come down, but the number of builders coming into the space, the number of smart contracts deployed, the number of people is still increasing. Overall, we’re very bullish,” he noted, adding that Animoca has been out for months , adding nearly 60 investments to its portfolio.
Despite being active, the space is not as strong as it used to be. Cryptocurrency companies raised $2.6 billion across 353 investment rounds, according to PitchBook’s recently released Cryptocurrency Report Q1 2023. The transaction value decreased by 11% month-on-month, and the total transaction value decreased by 12.2%.
Siu’s remarks come on the heels of major developments affecting the cryptocurrency space since FTX’s precipitous crash in November 2022. In the United States, for example, the Securities and Exchange Commission has launched a crackdown on cryptocurrency companies in an attempt to regulate the industry through enforcement actions.
In contrast, Hong Kong has implemented a cryptocurrency business licensing regime to mitigate the risks associated with the digital asset market. The United Kingdom has taken a similar approach, approving legislation giving regulators the power to create and enforce regulations for cryptocurrency businesses.
“If you think about it (with regards to crypto venture capital) from a North American perspective, it might sound bad. When you go to the Middle East, Asia, it’s actually very active,” Siu noted. The CEO said that the regulatory aspect has been a “heavy hammer” for Web3 companies. “It created a lot of fear because people didn’t know what was going on,” he continued.
The seasoned cryptocurrency entrepreneur doesn’t believe in coincidences when it comes to the different approaches countries are taking to the industry. For Xiao, the favorable environment in the Asian country and the hostile campaign in the United States are part of the country’s emerging technology agenda.
“There is also a national interest in pushing Web3 as a narrative, sort of like the end user’s interest in self-sovereign identity. The US is doing everyone a favor. But sadly, because I think the US is important in this (…) due to For political reasons, they’re handing it over to the rest of the world to function. But the exciting side is that it allows the ecosystem to flourish in a way that hasn’t been possible before.”
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