Previously known for its undying hunger for tech investments, Tiger Global Management is already feeling the heat as losses from their bets on blue-chip cryptocurrency companies grow. The company’s $12.7 billion venture fund, which was established in 2021, reportedly generated a 20% loss on paper, as of December 2022. Twelve significant cryptocurrency firms, including FTX, OpenSea, Bored Ape Yacht Club’s developer Yuga Labs, MoonPay, Helium, and Worldcoin, shared in the loss.
One of Tiger Global’s biggest losses was its investment in OpenSea, where the company invested $126.8 million, which is now worth just $30.2 million. This is not an isolated case, as shares in prized crypto companies are available on secondary market platforms at steep discounts. On March 8, a crypto news publishing house reported that some OpenSea shares were trading at a 51% discount on Birel.io, a secondary marketplace.
Despite these losses, some major banks and financial institutions are still investing in the crypto world. Credit Suisse, for example, has made a significant investment in the crypto world, contributing $65 million to the fundraising run of Taurus, a digital asset infrastructure dealer. Before being bought out, Credit Suisse was trying to improve its balance sheets. One of the measures taken by the bank to achieve this was a massive spending review, but the move to invest in the crypto sector has also played a role. The latest quarterly report shows that 30% of the bank’s total revenues now come from crypto.
The recent scandals in the cryptocurrency industry have caused a shift in the risk appetite of venture capitalist (VC) firms, with general VC firms reducing their investments in digital assets. However, crypto-specific VCs remain faithful to the cause, continuing to invest billions of dollars in the industry. Despite the scandals and general lull in price action, “crypto-native” VCs remain optimistic about the potential of blockchain technology. People still see use cases for blockchain. They think that the full potential of this technology hasn’t been realized.
To sum up, while Tiger Global Management has suffered significant losses due to their bets on crypto startups, some major financial institutions are still investing in the crypto world— although there might be some caution exercised now. Crypto-specific VCs remain optimistic about the potential of blockchain technology and continue to invest billions of dollars in the industry.