Market Insight Update: Crypto in the Secondary Market
During the peak crypto run, several startups in the category raised sequential rounds of capital to develop their tech stack and buoy acquisitive growth.
Recently, Rainmaker data has shown that late stage investing in crypto names has slowed, allowing these companies to grow into their valuation. Moreover, the lag in buyer competition offers investors the opportunity to explore private growth narratives at significant discounts.
At the macro level, several trends signal crypto’s continued growth trajectory:
Bitcoin is up, reaching an all-time high in 2023 of $40k+ for 1 BTC, driven in large part by hopes of a Bitcoin exchange-traded fund (ETF)
Market sentiment for a hold on interest rate hikes, or even soon cuts, could increase the appeal for riskier assets like crypto
Institutional adoption and interest in blockchain-based currency persist
Meanwhile, from Rainmaker’s vantage point in the private market:
Secondary deals in select crypto names are trading at 65%+ discount
Sellers are impatiently seeking liquidity, while buyers want to underwrite based on fundamentals
The top private crypto names attracting attention are Chainanalysis, Consensys, Kraken
Together, the positive macro dynamics and sparse secondary market activity create a compelling case for investors seeking to access the promise of crypto companies’ growth at an advantageous entry point.
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