Digital Assets – an apocalyptic wasteland or a universe of opportunities?

The largest lenders, the most prominent funds and the biggest protocols collapsing left, right and centre, does this mark the beginning of the end or a plethora of opportunities?

Our digital assets team has been going for about a year now and has experienced both the ups and downs expected from such a volatile market, but one thing is certain, we are not going anywhere and neither is the crypto space.

What the world has witnessed over the last 6 months has been a huge deleveraging across the board largely due to an unfriendly macro backdrop. The crypto space, having arguably benefitted the most from the pandemic-induced fiscal boost, has also taken the hardest hit so far in the reversal. Yes, those who have shown any lack of risk management or considerations for tail events have been swiftly dispatched, but with that there have been opportunities for those that remain.

DeFi still stands, exchanges are still running and we are still capturing the opportunities which the volatility presents. Who knows when the market will turn again? (Mr Powell excluded), but in the meantime there is much to do. With DeFi protocols surviving the stress test (without any third party bailouts) where many centralised crypto platforms have not, we at Maven believe this has actually shown the importance of these protocols and appreciate the chance to continue building and working on them.

Despite decreasing volumes across the board we are still leagues away from what we witnessed in 2018. Institutional players have joined the mix and are not going anywhere (liquidations permitting). With CEOs of many major public companies coming out and saying they see a long term future of crypto due to the benefits of decentralisation and a more widely accessible financial system, it seems the world has cottoned on that volatility does not mean doom.

Digital assets as a space is clearly maturing and discovering where they stand in the broader financial system. Regulation is starting to show up and we believe this will be a huge positive as it will enable greater access for corporations and individuals, into a space which continues to innovate and challenge how things should be done. Whether this is all digital commodities or securities will soon become clear and will enable the space to grow into what we think its true potential is.

So despite what could be perceived as chaos, there is light at the end of the tunnel. Crypto cycles come and go, much faster and much more aggressively than traditional markets but at Maven we are ready to capture opportunity in the tough times and the good, and our belief in the industry is stronger than ever.